Mortgage Update — The Investor Market Is In For A Shock

Keep your eyes on the ball!Keep your eyes on the property ball! soccer ball hits man in face

Whether the sport is cricket, soc­cer, rugby, ten­nis, Aus­sie rules or any other ball sport, keep­ing your eyes on the ball is of utmost importance.

The same concept applies to home loan interest rates. The second you take your eyes off your home loan you could find your­self mak­ing a costly mistake.

If you took out a vari­able home loan more than 2 years ago, there is a great chance you are pay­ing far too much interest!

The table below demon­strates my point.

paying far too much interest Mortgage Update

The “Note” at the bot­tom of this table is cor­rect. Lenders are keen to offer sur­pris­ing dis­counts depend­ing on your loan size and equity level.

Hav­ing a Smart­line Mort­gage Adviser is like hav­ing a coach. I can keep you focused, ded­ic­ated and on-track.  As your “coach” I can make sure you get the best and most savvy res­ults possible.

Ima­gine the com­fort of know­ing that your home loan is almost always com­pet­it­ive. No trouble­some doubts that you might be pay­ing too much. That is what I am offer­ing you. The com­fort of fin­an­cial sta­bil­ity through my assist­ance in mak­ing well-informed choices.

The Investor Mar­ket is in for a Shock


MAJOR restric­tions and changes are cur­rently being intro­duced to Invest­ment Loan Policy.

These changes will undoubtedly impact the res­id­en­tial prop­erty mar­ket by redu­cing the demand side of the price equation.

I am very sur­prised to see how little media atten­tion has been given to these adjust­ments. I feel that you should all be aware of these changes in order to make informed decisions.

The Aus­tralian Pruden­tial Reg­u­la­tion Author­ity (APRA) has estab­lished new policy set­tings that restrict the lend­ing beha­viour of all fin­an­cial insti­tu­tions that also take depos­its. This is an import­ant point. Lenders that do not hold a deposit tak­ing license are not impacted by APRA’s restrictions.

Smart­line has sev­eral lenders on our panel that are not impacted by these APRA restrictions.

Some of the restric­tions that have been intro­duced to invest­ment loan policy include:

  • Some “major” lenders now call for bor­row­ers to provide a 20% deposit when buy­ing an invest­ment prop­erty without col­lat­eral security.
  • Des­pite vari­able interest rates being at 4.50% p.a. or less, many lenders now assess a borrower’s capa­city at 7.50% p.a. or above.
  • Many lenders have removed the neg­at­ive gear­ing sav­ings that once allowed investors to bor­row more.
  • A hand­ful of lenders have insisted on bor­row­ers mak­ing prin­ciple redu­cing repay­ments rather than interest-only repayments.
  • The major­ity of deposit-taking lenders are no longer offer­ing nego­ti­ated interest rate dis­counts for invest­ment loans.

These changes have been flow­ing through to our lend­ing team every day for the last two months. As you can see from the table below, res­id­en­tial dwell­ing sales in NSW are yet to be impacted but I feel the impact will start to be seen in August.

residential dwelling sales in NSW

What can your cli­ents do about these changes?

1. Use an exper­i­enced Smart­line mort­gage broker rather than a bank man­ager. Dif­fer­en­ti­ation of Policy between lenders has not been this great since the late 90’s. One bank’s trash may be another bank’s treasure.

2. Use a Smart­line mort­gage broker with a large panel of non-deposit tak­ing lenders. These lenders are not impacted by APRA’s restric­tions and may be able assist your cli­ents to meet their invest­ment goals.

Houses and Units — More Qs than As?

RP Data / Corelo­gic have recently pub­lished some obser­va­tions that chal­lenge the grey cells.

In par­tic­u­lar, the com­par­ison between units and houses in every cap­ital city can gen­er­ate a lot of ques­tions relat­ing to sup­ply and demand.
Some of the more thought-provoking ques­tions that can be seen in this table below are:

1. Sydney units now have a higher median price than Mel­bourne houses. Does this reflect a gen­eral under sup­ply of res­id­ences in Sydney or is Mel­bourne ready for a cap­ital growth period?
2. Does the 44% gap between houses and units in Can­berra point to an over­sup­ply of units or an under­sup­ply of houses?
3. The cap­ital with the smal­lest per­cent­age gap between houses and units is Perth. Does this reflect an over­sup­ply of houses or an under­sup­ply of units?
4. Does Hobart’s large per­cent­age gap between houses and units reflect a low demand for units?
5. Could the small gap between houses and units in both Bris­bane & Adelaide reflect a large source of land for houses?

median property price for may 2015

All of the above ques­tions can only be answered con­fid­ently with solid research.

Many people will tell you that try­ing to “time your entry” into the prop­erty mar­ket (for max­imum cap­ital growth) is a fool’s para­dise, how­ever, we beg to dif­fer. Research is the key to a suc­cess­ful entry.

If you are look­ing to enter the prop­erty mar­ket, regard­less of whether it is for the 1st, 2nd or even the 30th time, please make sure you use Smart­line as part of your research pro­cess. We have access to an array of inform­a­tion that could tip the odds in your favour. We could also arrange your fin­ance so that you are ready to move quickly when a well-researched oppor­tun­ity presents itself.

Please give me a call. I would be more than happy to help you get the ball rolling.


With expert­ise span­ning mort­gage lend­ing, prop­erty law, prop­erty invest­ment and bor­row­ing to invest within Self Man­aged Super­an­nu­ation, Aaron Sains­bury offers more than 25 years pro­fes­sional advis­ory expertise.

He is an enthu­si­astic sup­porter of fin­an­cial lit­er­acy, work­ing closely with cli­ents to help them gain and main­tain con­trol of their fin­an­cial future.

Aaron is thor­oughly com­mit­ted to build­ing lifelong rela­tion­ships with cli­ents based on the highest qual­ity ser­vice, advice and trust.

Con­tact Aaron dir­ect on 02 9818 8643 .

Smart­line Per­sonal Mort­gage Advisers
G5/1–15 Barr Street , Bal­main NSW 2041
Author­ised Rep­res­ent­at­ive No 298191
Smart­line Oper­a­tions Pty Ltd Cor­por­ate Author­ised Rep­res­ent­at­ive No 376868
Aon Hewitt Fin­an­cial Advice Ltd AFSL No 239183

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Cnr Federal Road Prospect Highway Seven Hills NSW 2147 Australia