Lender removes investor curbs as demand eases

An Australian mortgage lender has made changes to its home loan rates in an effort to shed some of the complexity that APRA’s lending curbs had created.

Speaking to The Adviser, Newcastle Permanent CEO Terry Millett explained that the mutual lender’s decision to reduce its fixed-rates on investor loans to align with its owner-occupied fixed-rate offering will simplify things for bank staff, customers and mortgage brokers.

“Across the industry we are seeing investor loan portfolios reduce and there are really two factors driving that,” Mr Millett said.

“One is that all ADIs have been given the guideline by APRA of a maximum 10 per cent growth.

“For ourselves over 2015 we had very carefully managed our investor portfolio growth and didn’t exceed APRA’s 10 per cent guideline,” he said.

Mr Millett said Newcastle Permanent has been eagerly awaiting an opportunity to “remove some of the measures we put in place to manage our fixed-rate growth, such as our fixed-rate investor loans.”

“We see these as adding complexity to our mortgage brokers, our customers and our staff,” he said.

“We’ve taken the opportunity now given the level of growth in our investor portfolio at the moment and given the level of demand in the market for investor-purpose home lending to remove that measure.”

All of the pricing and policy changes implemented by mortgage lenders, from LVR caps to two-tiered pricing, have all “made life harder” for brokers, who are now dealing with “a massive proliferation of loan types”, Mr Millett said.

He added that Newcastle Permanent is constantly monitoring its fixed-rate products and aims to be consistently competitive.

[Related: Investors divided on fixing loans]

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