This pushes the annual growth figure for investment housing credit up to 6.2% from 5.6%, according to the latest figures from the Reserve Bank of Australia (RBA).
These figures could concern the Australian Prudential Regulation Authority (APRA), which has been trying to slow down this type of lending since late 2014.
APRA actually has a 10% annual speed limit for property investment lending growth, so the big rise from 5.6% to 6.2% will concern them.
ANZ Bank economists Daniel Gradwell and Jo Masters agreed, and said APRA would be “on notice” if the growth continued
“Annual growth in investor borrowing remains well below APRA’s 10 per cent speed-bump, but ongoing monthly growth of this magnitude would put the regulator on alert once more,” they said.
AMP Capital Chief Economist Shane Oliver suggested that APRA should tighten investment lending even further.
“You could argue 10 per cent is still a relatively high number in an economy where household income growth is only really 5 or 6 per cent at best,” he told Fairfax.
Aust Dec credit grth > exp +0.7%/5.6%yoy driven by biz lending. Lending to prop investors +9%pace last 3 mths. Case for new APRA tightening pic.twitter.com/LK121LiVZq
— Shane Oliver (@ShaneOliverAMP) January 31, 2017
It is likely the bosses of the ‘big four’ banks will face questioning over this rise during the next round of parliamentary hearings in March.
The House of Representatives Committee on Economics is carrying out these hearings as part of their review of Australia’s banking and financial system.
For further information regarding comparing current home loan products available, please see our comparison table below which includes links directly to the financial insurers website. This features variable home loans available for property investors, sorted by comparison rate (lowest – highest). Please note that this table features products that are based on a loan amount of $350,000 with a LVR of 80%, for properties in NSW.
Variable Loans
3 Year Fixed Loans
Investment variable rate rises over past 2 months
The accelerating growth of property investment lending over December took place in spite of the recent rate hikes to both fixed and variable investment home loans.
Since the December 1 2016, these are the investment variable home loans on CANSTAR’s database that have experienced rate hikes.
| Company | Product | Old Rate (1/12/2016) | New Rate (31/01/2017) | Change | Comparison Rate* |
|---|---|---|---|---|---|
| Adelaide Bank | Investment Smartfit Variable 90% | 4.44% | 4.54% | 0.10 | 4.75%* |
| Adelaide Bank | Investment SmartSaver 90% | 4.39% | 4.49% | 0.10 | 4.53%* |
| AMO Group | Inv Basic Variable | 3.95% | 4.05% | 0.10 | 4.25%* |
| AMO Group | Investment Variable | 3.95% | 4.05% | 0.10 | 4.25%* |
| AMP Bank | Select Package Investment Classic Variable 250-749k | 3.99% | 4.14% | 0.15 | 4.16%* |
| AMP Bank | Investment Classic Variable | 5.72% | 5.87% | 0.15 | 6.04%* |
| AMP Bank | Investment Basic Variable Loan | 4.06% | 4.21% | 0.15 | 4.25%* |
| AMP Bank | Affinity Package Investment Classic Variable 250-749k | 3.99% | 4.14% | 0.15 | 4.16%* |
| AMP Bank | Investment Essential Home Loan | 4.37% | 4.52% | 0.15 | 4.54%* |
| AMP Bank | Professional Package Investment Classic Variable 250-749k | 3.99% | 4.14% | 0.15 | 4.48%* |
| ANZ | Investment Variable | 5.52% | 5.60% | 0.08 | 5.71%* |
| Arab Bank Australia | Inv The Basics | 5.09% | 5.24% | 0.15 | 5.37%* |
| Aussie | Inv Select Standard Variable 100-499k 80% | 4.09% | 4.24% | 0.15 | 4.43%* |
| Aussie | Inv Select Basic Variable 100-499k 80% | 4.09% | 4.24% | 0.15 | 4.25%* |
| Auswide Bank | Freedom Package Investment Standard Variable 150k+ | 3.98% | 3.99% | 0.01 | 4.38%* |
| Auswide Bank | Investment Standard Variable | 5.65% | 5.72% | 0.07 | 5.87%* |
| Bank Australia | Inv Bridging | 4.84% | 4.92% | 0.08 | 4.96%* |
| Bank Australia | Inv Premium | 4.84% | 4.92% | 0.08 | 4.96%* |
| Bank Australia | Basic Home Loan – Inv (LVR <80) | 4.54% | 4.62% | 0.08 | 4.66%* |
| Bank Australia | Premium Package Inv Premium 100-399k | 4.64% | 4.72% | 0.08 | 5.09%* |
| Bank of Melbourne | Advantage Package Investment Variable IO 250-499k | 4.76% | 4.84% | 0.08 | 5.26%* |
| Bank of Melbourne | Investment Variable IO | 5.51% | 5.59% | 0.08 | 5.76%* |
| BankSA | Investment Variable IO | 5.58% | 5.66% | 0.08 | 5.82%* |
| BankSA | Advantage Package Investment Variable IO 250-499k | 4.78% | 4.86% | 0.08 | 5.28%* |
| Bankwest | Premium Select Home Loan Investment 80% | 4.29% | 4.64% | 0.35 | 4.66%* |
| Bankwest | Complete Home Loan Variable Investment 80% 200k+ | 4.19% | 4.54% | 0.35 | 4.93%* |
| Bankwest | Variable Investment 80% | 5.67% | 5.82% | 0.15 | 5.84%* |
| Bendigo Bank | Residential Investment Variable 250-499k | 4.86% | 4.96% | 0.10 | 5.08%* |
| Bendigo Bank | Connect Package Variable Investment 250-499k | 4.51% | 4.61% | 0.10 | 4.84%* |
| Commonwealth Bank | Inv No Fee Variable Rate | 4.79% | 4.86% | 0.07 | 4.86%* |
| Commonwealth Bank | Inv Standard Variable | 5.49% | 5.56% | 0.07 | 5.71%* |
| Commonwealth Bank | Wealth Package Inv Standard Variable 350-749k | 4.89% | 4.96% | 0.07 | 5.36%* |
| Commonwealth Bank | Inv Rate Saver | 5.03% | 5.10% | 0.07 | 5.25%* |
| Commonwealth Bank | Inv Economiser | 5.03% | 5.10% | 0.07 | 5.25%* |
| Delphi Bank | Investment Complete | 5.55% | 5.65% | 0.10 | 5.78%* |
| Delphi Bank | Investment Essential | 5.55% | 5.65% | 0.10 | 5.82%* |
| Gateway Credit Union | Inv Construction Loan | 5.26% | 5.38% | 0.12 | 5.44%* |
| Gateway Credit Union | Inv Low Rate Essentials | 4.62% | 4.74% | 0.12 | 4.76%* |
| Heritage Bank | Home Advantage Investment Variable 250-699k | 4.29% | 4.44% | 0.15 | 4.79%* |
| Heritage Bank | Investment Variable | 5.29% | 5.44% | 0.15 | 5.59%* |
| Heritage Bank | Investment Discount Variable 150k+ | 4.09% | 4.24% | 0.15 | 4.29%* |
| Homeloans | Investment Monipower | 4.14% | 4.24% | 0.10 | 4.29%* |
| Homeloans | Inv Ultra Plus Variable IO 80 200-499k | 4.14% | 4.24% | 0.10 | 4.42%* |
| Homeloans | Inv Ultra Plus Variable PI 80 200-499k | 3.94% | 4.04% | 0.10 | 4.22%* |
| HSBC | Investment Home Smart | 5.50% | 5.60% | 0.10 | 5.66%* |
| HSBC | Investment Variable | 5.50% | 5.60% | 0.10 | 5.66%* |
| IMB | Investment Standard Variable 90 | 5.31% | 5.41% | 0.10 | 5.47%* |
| IMB | Platinum Package Investment Standard Variable 90 150k+ | 4.66% | 4.76% | 0.10 | 4.82%* |
| iMortgage | Investment Fusion Variable PI 80 200-499k | 3.79% | 3.89% | 0.10 | 4.04%* |
| iMortgage | Investment Fusion Variable IO 80 200-499k | 3.99% | 4.09% | 0.10 | 4.24%* |
| ING DIRECT | Inv Mortgage Simplifier 150-499k 80% | 4.14% | 4.29% | 0.15 | 4.33%* |
| ING DIRECT | Inv Orange Advantage Variable 150-499k 80% | 3.99% | 4.14% | 0.15 | 4.36%* |
| ME | Inv Flexible Home Loan Max 80 LVR | 5.44% | 5.54% | 0.10 | 5.57%* |
| ME | Inv Basic Home Loan Max 80 LVR | 4.14% | 4.24% | 0.10 | 4.27%* |
| ME | Member Package Inv Flexible Home Loan Max 80 LVR 150-399k | 4.14% | 4.29% | 0.15 | 4.70%* |
| Mortgage House | Inv Advantage Complete Variable | 4.44% | 4.54% | 0.10 | 4.70%* |
| Mortgage House | Inv Advantage Variable 100-749k | 4.75% | 4.85% | 0.10 | 5.03%* |
| MyState | Special Residential Investment Loan 80% | 4.16% | 4.26% | 0.10 | 4.31%* |
| MyState | Inv Standard Variable | 5.11% | 5.23% | 0.12 | 5.30%* |
| NAB | Inv Base Variable Rate – P&I | 4.25% | 4.40% | 0.15 | 4.45%* |
| NAB | Inv Base Variable Rate – IO | 4.78% | 4.93% | 0.15 | 4.98%* |
| NAB | Private Tailored Pkg Investment Tailored Variable – P&I 250-499k | 4.55% | 4.70% | 0.15 | 5.40%* |
| NAB | Choice Package Investment Tailored Variable – P&I 250-499k | 4.55% | 4.70% | 0.15 | 5.08%* |
| NAB | Choice Package Investment Tailored Variable – IO 250-749k | 4.65% | 4.80% | 0.15 | 5.18%* |
| NAB | Investment Tailored Variable – IO | 5.50% | 5.65% | 0.15 | 5.79%* |
| NAB | Inv Base Variable Indicator Rate | 5.19% | 5.34% | 0.15 | 5.39%* |
| NAB | Investment Tailored Variable – P&I | 5.40% | 5.55% | 0.15 | 5.69%* |
| People’s Choice Credit Union | Investment Standard Variable | 5.52% | 5.60% | 0.08 | 5.67%* |
| People’s Choice Credit Union | Investment Basic Variable 80% | 4.74% | 4.82% | 0.08 | 4.89%* |
| QBANK | Classic Investor Offer 80% | 4.09% | 4.29% | 0.20 | 4.35%* |
| QBANK | Inv Classic Home Loan | 4.54% | 4.74% | 0.20 | 4.80%* |
| QBANK | Classic Plus Inv Classic Home Loan 250k+ | 4.44% | 4.64% | 0.20 | 4.99%* |
| QBANK | Inv Standard Variable | 5.04% | 5.24% | 0.20 | 5.30%* |
| RAMS | Inv Full Feature | 5.45% | 5.60% | 0.15 | 5.66%* |
| RAMS | Inv Low Rate | 4.55% | 4.70% | 0.15 | 4.76%* |
| SERVICE ONE Alliance Bank | Investment Standard Variable 250-499k | 4.60% | 4.70% | 0.10 | 4.85%* |
| St.George Bank | Investment Variable IO | 5.59% | 5.67% | 0.08 | 5.84%* |
| St.George Bank | Advantage Package Investment Variable IO 250-499k | 4.79% | 4.87% | 0.08 | 5.29%* |
| Suncorp Bank | Investment Variable | 5.72% | 5.87% | 0.15 | 6.03%* |
| Suncorp Bank | Home Package Plus Investment Variable 150k+ | 4.09% | 4.32% | 0.23 | 4.69%* |
| Suncorp Bank | Investment Back To Basics | 3.98% | 4.29% | 0.31 | 4.34%* |
| The Rock | Investment Variable | 5.61% | 5.73% | 0.12 | 5.86%* |
| UBank | Inv UHomeLoan Variable | 4.36% | 4.46% | 0.10 | 4.39%* |
| UBank | Investor IO-Investor Extra IO Offer | 4.14% | 4.24% | 0.10 | 4.24%* |
| UBank | Investor PI-Investor Extra PI Offer | 3.79% | 3.89% | 0.10 | 3.89%* |
| Virgin Money | Reward Me – Investment Variable 80 75-499k | 4.09% | 4.19% | 0.10 | 4.32%* |
| Westpac | Rocket Investment Loan IO | 5.60% | 5.68% | 0.08 | 5.83%* |
| Westpac | Inv Flexi First Option IO | 4.95% | 5.03% | 0.08 | 5.09%* |
| Westpac | Premier Advantage Rocket Investment Loan IO 250-499k | 4.80% | 4.88% | 0.08 | 5.26%* |
Source: CANSTAR. Based on Investment variables loans available for $350,000, 80% LVR, P&I Interest and Interest Only. *Comparison Rate based on $150,000 over 25 years.
The Investment Home Loan Market
| Table: Investment Home Loan Market – Snapshot of the current market (23/01/2017 -30/01/2017) | |||
|---|---|---|---|
| Basic Variable | Standard Variable | Package Variable | |
| Average | 4.56% | 4.72% | 4.58% |
| Min | 3.69% | 3.69% | 3.88% |
| Max | 5.65% | 6.08% | 5.60% |
Source: CANSTAR. The search results do not include all home loan providers, and may not include all features relevant to you. Loans based on loan amount of $300,000 and available for principal and interest repayments.
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