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March lending environment update

The news is good for those actively looking to borrow money or refinance. Competition among some of the banks and second tier lenders is keeping interest rates at all-time lows. Credit conditions are stable, without significant changes expected any time in the near future.

SMSF lending remains tight, with lenders being careful with approvals. Potential changes to SMSF lending appear to have been put on hold, bringing much needed stability to the sector. This has allowed additional banks to enter the market, creating slightly higher levels of competition.

Conditions are slightly better for homeowners, with credit conditions easing and slightly higher approval rates from the banks as they loosen their credit criteria. For investors, the tight restrictions are still slowing lending growth, with loan to value ratios and assessment criteria tight.

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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