Banks move the goalposts with their property loans
Banks have levelled the interest-only rates charged between investors and home borrowers and for the first time all borrowers have paid about the same on mortgages in almost a decade.
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As the residential property sector stabilises, the banks have been playing some games in the lending market and if you are borrowing for a home or an investment, you need to know what’s going on.
For investors, one of the most interesting developments is a narrowing of the gap between what investors pay for interest-only loans and owner-occupier loans. In short, investors are now paying more or less the same rate on interest-only loans as owner-occupiers do.
Investors and home loan borrowers have been paying different rates on loans since regulatory changes in 2014 divided the market. But the narrowing gap between the different sets of borrowers is not because investors are getting a better deal, rather the banks are penalising owner-occupiers after banking data revealed poorer credit standards among home borrowers compared to investors.
Separately, after a surge in fixed-rate loans when rates were at rock bottom, the fixed-loan market has been asleep for at least two years. But the latest lending statistics suggest a revival. Why? Find out in today’s podcast.
Who is the guest
Canstar chief commentator Steve Mickenbecker
Why him?
Mickenbecker is an expert on comparing the home loan and deposit market.
What are the topics?
● Why interest-only borrowers are being punished;
● How banks can offer more than the RBA for deposits;
● Why home loan borrowers are fixing again; and
● The bias against retirees in the lending system.
Question of the week
Regular listener Ben asks: “Some banks (like proper ones covered by the $250k thing) are offering term deposit rates around 5 per cent when the RBA is at 4.1 per cent. Why would they do that? Can’t they just borrow as much as they want from the RBA at 4.1 per cent, or is my understanding of how the RBA works wrong?
Questions always welcome to the podcast, via themoneypuzzle@theaustralian.com.au
Originally published as Banks move the goalposts with their property loans