Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Navigating lending changes ‘a game of chess’, says broker

aaron bernadette web aaron bernadette web
Lucy Dean 4 minute read

Interest-only loans have long been the preferred product for property investors, but ongoing rate hikes and lender changes have led one broker to change his view.

Sydney-based broker Aaron Christie-David of Atelier Wealth specialises in investment lending and says pricing and policy changes have forced him to rethink the type of products he recommends.

He likens the current environment to a “game of chess” and says he needs to be prepared for potential movements by lenders ahead of time.

“You've got to think two or three steps ahead because we know bank policy's going to change,” Mr Christie-David told The Adviser. “We know your own situation's going to change. Your job situation, or you're going to have another child, for example, so we know this all in the background because we've spoken to our clients enough as well.”


Atelier Wealth has now begun recommending more principle and interest loans to its property investor clients. Mr Christie-David says the banks “aren’t loving” interest-only borrowers or loans at the moment.

Last week a number of banks, including three of the four majors, announced further rate hikes for interest-only borrowers on investment loans. At the same time, banks have started reducing rates for P&I borrowers.

Following 18 months of significant property prices growth and record low rates, Mr Christie-David says borrowers should be using any surplus cash to pay down their debts.

“Having those conversations with clients isn't easy because they think you're mad sometimes to recommend P&I on an investment property, but … now those ones are coming to the fore,” he said.

However, he adds that understanding the client’s needs and goals was key.


“If your goal is to have maybe one or two investment properties paid off, then why wouldn't you just pay if off now? You've got the cash flow to do it,” Mr Christie-David said.

“Otherwise the option is to sell one property and then have the cash to reduce the loan balance, for example.”

The Australian Prudential Regulation Authority introduced limits on interest-only lending in March.

[Related: A husband and wife team on why brokers need more education]

Navigating lending changes ‘a game of chess’, says broker
aaron bernadette web
TheAdviser logo

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

aaron bernadette web


more from the adviser
SME small business

Breaking News

Mortgage brokers writing commercial loans hit high

The number of mortgage brokers branching into commercial loans ha...

tech tools

Breaking News

Asset finance neo-lender launches to broker channel

A new fintech backed by Resimac has launched, aiming to overcome ...

handshake news

Breaking News

ASX-listed lender joins FAST panel

A personal lender has become the latest addition to the aggregato...