As widely expected, the Reserve Bank of Australia (RBA) left official interests rates on hold today. Currently, the majority of economists are predicting official rates to remain on hold until at least the middle of next year.
Whilst the official rates remain steady, this hasn’t stopped the banks from continuing to make changes to investment loan rates, and loans with interest only repayments. Some of the major changes include:
– It’s becoming much harder to request interest only repayments for a home loan (owner occupied property), as banks are following the banking regulator’s recommendations and wanting home owners to pay down the balances of their home loan debt.
– As an example, one major bank is offering new clients a 3.85% home loan rate when you have principle and interest repayments, but the rate jumps to 4.42% if you select interest only repayments.
– Many banks are also only allowing interest only repayments when the loan is under a 80% loan to value ratio. This can include investment loans with some lenders.
Stay well until next month and feel free to call if we can be of further help.