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April lending environment update

This month we’ve seen a number of banks come back with increases to their base rates and lowered discount margins.  While competition is still high, some banks are breaking ranks and moving their rates higher.  It’s important to do your research and if you’re looking at a fixed rate, consider a ‘rate lock fee’ if you’re concerned that rates will increase prior to settlement.  This will ensure that you get the rate that you’ve been quoted, rather than the rate on offer at the time.

SMSF lending continues to get tighter, with another bank temporarily leaving the market.  The remaining banks in the SMSF lending space have committed to stay in the market and remain competitive.

Business lending has been competitive on pricing, so it’s a good time to revisit your business lending facilities.  New and more sophisticated products are hitting the market, so it’s possible that you may be able to switch to less expensive or more flexible credit facilities.

Home lending is somewhat unchanged from a credit perspective, with most of the major banks, top and mid-tier lenders leaving their credit policies unchanged.  However the price changes are of interest, with some banks becoming more obviously expensive.  This presents a real opportunity to look at refinancing current debt.  New borrowers should do their due diligence or use a reliable broker to find them the right loan.

Loan type Maximum loan to value ratio Comments
Home loans 97% Includes borrowing of lenders’ mortgage insurance.
Investment loans 90% Lenders’ mortgage insurance is payable on top of this.
SMSF loans 80% Principal and interest.  Maximum of 70% for interest only.

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