Major bank halts investor refinancing

The bank said that standalone investor refinance applications submitted prior to 13 February will be processed, subject to the bank's normal lending criteria.

However, CBA added that applications which include both investor and owner-occupier loans would not be impacted.

The bank commented: "Commonwealth Bank is committed to consistently delivering the best customer experience for home buyers, upholding the highest level of professional standards, and meeting our responsible lending and regulatory obligations."

CBA is the second bank in as many days to announce that it is pulling back on investor refinancing, following a similar announcement by Bankwest earlier this week.

It is thought that the moratorium on investor refinancing is due to the investor lending speed limit implemented by APRA two years ago, which indicated that the growth in loans to property investors should not exceed 10 per cent.

Investment home loans represent 35 per cent of CBA’s mortgage lending.

In the past few months many banks have increased their rates on investment home loans, with AMP Bank raising variable interest rates for new residential investment loans at the beginning of this week.

Speaking to The Adviser, the bank said that the AMP Bank Investment Basic Variable Loan would increase by 10 basis points to 4.31 per cent. The AMP Bank Investment Professional Package variable loan increased by 20 basis points to 4.34 per cent for loans above $750,000.

The rate change did not apply to variable interest rates for owner-occupied loans or existing investment customers. There was also no change to AMP Bank’s fixed rates.

“A number of factors feed into any interest rate decision including competitive landscape, the need to manage wholesale funding costs and maintain a balanced portfolio in line with regulatory guidelines. We remain focused on providing competitive interest rates,” an AMP spokesperson said.

AMP Capital chief economist Shane Oliver has formerly noted that while housing credit growth was unchanged at 0.5 per cent month-on-month (or 6.3 per cent on an annualised basis) in December, a continued deceleration in owner-occupier housing credit relative to investor credit was "concerning".

“Over the last three months investor housing credit rose at an annual rate of 9 per cent and is now rapidly approaching APRA’s 10 per cent threshold,” Mr Oliver said.

“It is increasingly clear that the dampening impact of APRA’s 2015 macroprudential tightening has worn off to a significant degree,” he said.

“With household income growth in the economy running well below 10 per cent year-on-year and the Sydney and Melbourne property markets continuing to run too hot in the face of ultra-low interest rates there remains a case for APRA to further lower the 10 per cent growth threshold for property investor credit.”

[Related: Non-bank launches new investor mortgage offering]