Borrowers rush to reclassify loans following investor pricing hikes

Mr Love said the bank is currently measuring the number of customers who are switching their loans from investor to owner-occupied separately to its investor loan growth. He added that St.George is providing this information to APRA.

“The pricing differential change has seen a number of customers call through to our call centre and request to be transferred over," he said.

St.George has a process in place – "a series of questions to go to the customers" – which it follows before reclassifying home loans, according to Mr Love.

“If necessary, if we are challenged, we might seek some evidence through notices of assessment to make sure they are not receiving any tax benefits or negative gearing benefits from the property being used," he said.

Mr Love stressed the importance of determining whether a customer is receiving negative gearing benefits from the property.

“We want to be really clear and upfront with our customers around that,” he said. “We’ve provided scripting to our call centres and to our branch network as well.”

Brokers have asked for more knowledge of the bank’s processes to educate their customers on loan reclassification and requested more information about St.George’s processes.

Mr Love said reclassifications could have a significant impact on the rate of investor lending growth for the bank.

“There will be some reclassifications which will boost our owner-occupied component, but we will measure those separately and track those over time,” he said.

[Related: Mortgage Choice breaks down investor intentions]