Banks to Offer Higher Interest Rates to those Buying Property for Investment Purposes

Published By : 21 Aug 2015 | Published By : QYRESEARCH

With banks halting on lending money to property investors, several borrowers that are buying a house they do not live in are being offered the sharpest deals in the market. On the other hand, those who are buying houses for occupying the space are now targeted with low interest rates along with several cash back offers. Furthermore, the mortgage brokers are saying that these customers are also negotiating with higher discount on the interest rate.

A significant gap has been noticed between the interest rates being charged to owner that occupy the space and the investor consumers of most banks. Over 15 lenders which include the Commonwealth Bank, ANZ Banking Group, and Westpac are presently offering their owner-occupier rates, which are at least 0.22 lower in percentage points. Though this might be a great news for those who are looking for property they want to occupy, it is not such a good one for those who are planning to buy property for investment purpose.

With this move, providers are trying to control the investor lending, as they are looking somehow to rebalance their book back towards the people who are buying property for occupying purpose. However, the flipside of this is that investors are paying more and the owner occupiers are gaining a much better deal in some cases, commented a spokeswoman for RateCity.

Let us look at the example of HSBC that has a variable rate of 3.99% for owner occupiers. Another example that of shows that it is offering a 4.02%. Offering rates beyond the advertised rate is also helping banks to scale back their interest rate discounts for investors and provide a deeper discount to owner-occupier consumers. This is the exact size of the discount offered that will depend on the bank and the consumer’s financial situation.
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