Managing director of mortgage broker Homeloanexperts.com.au, Otto Dargan, said several lenders, including Commonwealth Bank, had become more competitive in their home loan pricing for investors in recent months, by offering lower interest rates. These lower interest rates are not always publicly promoted, but can include discounts off the standard variable rate for investors of up to 1.5 per cent. “The name of the game is to get as close to the 10 per cent APRA target without going over it,” Mr Dargan said. However, the banks’ change in tack comes as house price growth has returned, with figures this week showing Sydney prices jumped 3.6 per cent in May, and 1.6 per cent in Melbourne. If the growth continues, APRA and the Reserve Bank may need to consider lowering the 10 cent cap on investor credit growth, some economists say.
Too cautious?
AMP Capital chief economist Shane Oliver said APRA’s 10 per cent cap appeared “quite excessive in the scheme of things” when compared with the much slower growth in household incomes.