Major changes in the banking market have occurred since July, with competition heating up so much some are calling it a war – great for home owners!  Most banks have been adjusting rates up and down since that time (despite no move in cash rates from the Reserve Bank).  Are you paying too much to your bank?  How does 3.99% sound?

Almost everyone wants to be able to buy a home sooner rather than later, however saving the expected 20% deposit is far easier said than done.  Let's face it - with Melbourne’s median dwelling price now $563,000, saving a deposit of $112,600 plus purchase costs is no easy task, and would take strong discipline and many years!

New banking rules continue to be imposed on us all!  In the July I wrote of rapid bank changes happening and in the two months since then the pace of change has increased, and has gained front page coverage.  The majority of existing investment loans have had their interest rates increased in August, this should be prompting you to review your lending if you have not recently done so. 

“How much can I borrow?” is a standard start point for many prospective residential property purchasers.  The start point should be what repayments can you afford to make?  Banks do not willingly issue loans to clients who cannot afford to repay them, they are also under regulatory pressure to lend responsibly, but you should always check your own numbers as well!

Borrowers beware, banks are yielding to regulatory pressure via APRA, and the ‘rules’ are changing dramatically!

Changes will impact all those taking out a property mortgage, however investors will be impacted most, with all 4 major banks now penalising investor loans over owner occupier loans.