BankWest withdraws discount mortgage products from the market

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BankWest becomes the latest lender to pull out a range of discount mortgage products from the market, triggering speculation that it might be close to the regulatory speed limit intended to prevent the property market from overheating.

The subsidiary of Commonwealth Bank of Australia has withdrawn its Complete Variable Home Loan investor special rates. A spokesman said, "We constantly review our products and pricing. We can confirm it has been withdrawn. The special interest rate was always only intended to investors for a limited time." He added that it has an alternative and competitive three-year home loan rate of 3.99 per cent for investors.

However, the bank has declined to comment whether it is doing so because its lending growth is already on the brink of breaching the Australian Prudential Regulation Authority's 10 per cent annual growth rate. Lenders below their 10 per cent annual growth limit are offering better terms and bigger discounts than competitors exceeding the limit.

According to an analysis by Digital Finance Analytics, the average discount on investment loans more than doubled from about 15 basis points to more than 36 basis points between March and May. This compares with 27 per cent growth for owner-occupied refinance.

"I wouldn't be surprised to see more of this type of activity from other lenders as they look to achieve the right level of investment lending growth," said Jessica Darnbrough, a spokesperson for Mortgage Choice. "Then once the new financial year starts for the Australian lenders, we may see them open the floodgates for investment lending."

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