Heritage Bank has been growing its investor lending faster than APRA guidelines, and says it is acting decisively to address the situation.
The non-major bank recently announced an increase of 30 basis points on its special discount variable rate home loan for investors, taking the rate to 4.49 per cent.
Heritage also increased its fixed investor rates by 10 basis points across the board, with its standard one-year fixed rate now at 4.49 per cent, its two- and three-year rates at 4.59 per cent, and it’s five-year rate at 4.69 per cent.
According to APRA statistics, Heritage grew its investor lending book faster than the regulator’s 10 per cent guideline during the 12 months to May, reporting a 12.8 per cent increase.
“Like all lending institutions, APRA’s put us under a restriction of no more than 10 per cent investor lending growth in any one given year, and particularly with the strong lending we had earlier this year, we needed to do something to slow it down,” David Ure, Heritage’s head of branch and third-party channels, told The Adviser.
Heritage has also recently replaced its Professional Package with a new Home Advantage Package, which allows customers to package their standard variable rate, fixed rate or living equity loan with a credit card and transaction account, according to Mr Ure.
“It also features discounted variable interest rates, and no application fee, monthly fees, redraw or switching fees for home loans. It only has an annual fee of $350 for the package,” he said.
“We’ve also added four new BDMs to our broker support panel, doubled our sponsorship to conferences, and we’re committed to upgrading the way we receive our applications electronically.
“We just want to show with all of these changes that we’re truly committed to the third-party channel.”