Australia’s big four banks seem to be losing some investor borrowers as they increasingly turn to non-bank lenders for home loans.
Mozo home loan expert Steve Jovcevski believes non-bank lenders will be able to take full advantage of Australian Prudential Regulation Authority’s (APRA) pressure on banks to tighten requirements and the processing of investor loans.
“Non-bank lenders are likely to reap the rewards of investors being turned away by the big banks, which are now demanding higher deposit amounts and getting rid of discretionary discounts,” Jovcevski said.
Mozo’s latest data showed investor finance has jumped by 54% in two years. The figure doubled the rate of owner occupier finance, 27%, from March 2013 – March 2015.
“Some investors are having applications rejected, resulting in a flurry of panicked refinancers flooding the market, especially those settling on properties as early as this week.”
“In particular, those who have bought properties off the plan will get a rude shock when it comes to financing their purchases,” he said.
Mozo’s new study also released a list of the top five non-bank lenders which investors could check to secure a loan. According to Mozo, a total of 48 non-bank lenders in the country are not strictly under regulation by APRA.
Homestar, with a rate of 3.98% with a maximum LVR of 95% tops the list, followed by with 3.98% for a 90% LV. iMortgage comes in third at 4.04% with an LVR of 90%. Newcastle Permanent and State Custodians both have the rate of 4.09% with 80% LVR.
“Not being strictly regulated by APRA doesn’t mean it will be a walk in the park, these lenders will still be cautious as a result of the actions of the majors,” said Jovcevski.