New interest rate restrictions for investment propertys

[Tjc]

Hi all

Thought people would be interested to know my broker just advised me that advertised special rates will now no longer apply to any property that isn't owner occupied even with 20% equity for deposit, unsure if this is all banks but just checked the Westpac website and the wording to that effect has been changed.

Certainly just added cost to borrowing for investment purposes from now on though at this stage I'm unsure how "firm" this rule is to them and if advertised rates can still be negotiated.

[Don't believe the Hype]

You can always beat advertised specials anyway... Remember you here are the customer and the banks/other lenders are competing for your business. Who will they make more profit from (absolute $) investors or one off property buyers who borrow $500k once then pay it down over 25 yrs?

[Bobsyouruncle]

There is clearly a shift in policy being implemented according to many brokers. No doubt it will become clear-er in due course.

[Judge]

Yes the Westpac site says:
"*Special 1 and 2 year fixed rate eligibility criteria: minimum of 20% equity, salary credit to a Westpac transaction account plus a Westpac credit card or a specified Westpac insurance product**, to be approved or issued prior to drawdown date. These special fixed interest rates cannot be used in conjunction with any other Westpac home loan offers or discount packages, including previously negotiated offers, legal fee contributions or the Westpac Choices Home Loan with Airpoints™. These special fixed interest rates do not apply to loans for business or investment purposes." This is interesting...

[Don't believe the Hype]

The terms state...

Special (read - lower profit) rate if you pay salary into westpac (get you to do all your everyday bank int with them so you are more likely to go to them for future banking needs as it is easier to keep your banking together) plus a westpac credit card (read - high profit add on) or a specified westpac insurance product (read - high profit add on).

The bit about business and investor is to discourage the masses but if you push you can get this as well as removing the other conditions... I.e salary pad into account and other bank products.

Keep in mind everything is open to negotiation. Special rates and advertised rates are no different to asking prices in Realestate advertisements... They're a starting point for the negotiation that follows.

[Halfway To Paradise]

My broker told me that one bank has started to say that they will not negotiate on rates with investors the advertised rate is what you get. Not sure which bank it is I had more important issues to talk about so did not dwell on that matter.

[RollingCloud]

I told the bank I have my mortgage with that my salary will go into bank account with them. Never did it as they don't have a branch by my work. No one has ever said anything.

[Viking]

Ha, BNZ rang out of the blue last week and demanded to reduce my floating rate on one of my mortgages. What could I say?

Have it all in writing now. Was there when I got to the email. 0.75% until I decide what I am doing.

Never experienced that before.

Keep shopping around.

[Tjc]

What about if your using equity in your PPOR with previous fixed rates? If they choose not to negotiate is it just a matter of pricing up a break fee and deciding if that would save money in the long run by moving to a different bank?