The bigger banks may have been the best option a little while ago but now there are more options: non-bank lenders. They offer competitive rates, and are bound by the same regulations as banks.
There is a lot of talk going on about banks tightening policy and lifting rates on investment mortgages. I have even heard some mortgage brokers saying that it is getting tough out there and with the rules that the Australian Prudential Regulation Authority (APRA) have put in place, which regulates the banking industry, it is not surprising.
This is, however, creating a strong market place for non-bank lenders who are not governed by this body.
While some of the banks are lowering their maximum lending to 80% of the property’s value (Loan to Value Ratio – LVR), some non-bank lenders are still offering 95% (LVR) along with competitive rates that are the same as the ‘owner occupied’ mortgages.
Non-bank lenders are not rogue loan sharks. They are still bound by the laws of banks as defined by the Consumer Credit Code (a governing agency of all credit transactions in Australia) and by the Australian Securities and Investments Commission (ASIC).
They may vary quite considerably with their policies and products as they generally like to find a niche in the marketplace.
The moral of this story is find a good mortgage broker.
Make sure they have a wide and diversified panel of lenders which gives them access to the best lending options.
The bigger banks may have been the best option a little while ago however the lending landscape is changing rapidly for investors so make sure your finance specialist is keeping up to date