A Queensland-based bank has announced a 40 basis point increase to its investment products, citing a need to ensure that investment lending growth is “responsible”.
The Auswide Bank changes come into effect 23 August and apply to new fixed rate investment lending. As such, the new rates for loans without the bank’s Freedom Package start at 4.89 per cent per annum (p.a.) for three-year fixed rate loan terms and rise to 5.19 per cent p.a. for five-year fixed rate loan terms.
Home Loan Plus loans with the Freedom Package start at 4.79 per cent p.a. for two and three-year fixed rate loan terms and climb to 5.09 per cent p.a. for five-year fixed rate loan terms.
Additionally, Auswide has advised that all new investment lending will need to sit below a maximum loan-to-value ratio of 80 per cent.
Banks’ repricing of loans has become a regular occurrence following a May directive by the Australian Prudential Regulation Authority (APRA) instructing lenders to keep new interest-only lending to below 30 per cent and slow the growth of banks’ investor lending portfolios to at most 10 per cent per quarter.