If you are looking for a home loan to finance an investment property in Perth, It could become a lot more difficult if you don’t act soon. Thanks to a number of recent developments, a five figure deposit isn’t going to be large enough to finance an investment property soon.
The Numbers
In Sydney, for example, it is taking as much as $238,000 for market entry. In the past few years, it has been possible for both residential and commercial borrowers to put down a 5% deposit, take out mortgage insurance and obtain a home loan. Recently, one of Australia’s biggest lenders, National Australia Bank (NAB), tightened its standards in 67 different suburbs across Australia.
The result is that loans are being capped at 70-80% of a home’s value in those suburbs. While many of these suburbs are part of Sydney, some mining towns in WA are also on the list. In Sydney suburb of Fairfield, which is 25 km south west of the CBD, the low-end buyer will have to save at least $129,000.
Why Investment Loans are Harder to Obtain
Lenders are tightening up their standards for a variety of reasons. For investment properties, it is because lenders have been directed by the Australian Prudential Regulation Authority (APRA) to cap their investment property loans at 10% of their total loans. To maximise their chances of repayment, most lenders are tightening up standards on investment lending similar to what NAB is doing to residential buyers.
In addition, mortgage defaults and overdue payments are on the rise, causing many lenders to act on their own in order to protect their investments.
Purely Finance Can Help You
If you want to find investment loans with good terms, it is wise to go with a mortgage broker who specialises in investment properties. That is exactly what we do at Purely Finance. We have access to 30 different lenders offering a total of more than 2,000 different home loans. We know exactly who will treat your situation the best.
To learn more or for a free consult, call us today: (08) 9453 8888.