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My Investment loan was declined and the bank blamed APRA, what is happening?

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 You may have been told recently by your bank or broker that we have had some fairly significant changes to the landscape when it comes to Investment Lending and are somewhat confused as to why.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of banks, insurance companies, superannuation funds, credit unions, building societies and friendly societies.
APRA is the government regulatory body that has recommended changes to reduce the amount of investment lending by making it more difficult to obtain in an attempt to slow down the number of investors entering the property market.
Given Interest rates are so low at the moment they have deemed the risk too high for both borrowers and the lending institutions and are trying to take the heat out of the market by making it more difficult to borrow funds.
This has resulted in many and varied changes across all of the lenders dependent on how highly geared their loan book was towards investment. 
As an example one lender no longer will lend for an investment property purposes, basically have withdrawn from investment lending and they have increased their existing loan holder rate by .47%.
Other lenders have also increased rates on investment lending, reduce maximum lending values and most of them have basically made it harder to “service” the commitment which will result in more loans being declined.
As I write this article the changes keep coming on a daily basis and it may be some time before the dust settles, it would be an opportune time in the next 6 months to catch up with your mortgage broker to chat about what options are available. If you are in the market for an investment property then you may more than ever require their service to not only find the best investment loan for your situation however also to help find a lender that will actually accommodate the request.   


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