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#1 2017-03-16 00:14:30

SilverDJ
Member
From: Australia
Registered: 2014-11-01
Posts: 2,528

NAB Increases Rates

http://www.news.com.au/finance/economy/ … 24cc65a59c

NAB is jacking up its interest rate for new and existing investor home loans in a bid to clamp down on "strong" growth in the segment.
From next Friday, March 24, NAB's residential investment home loan variable rate will increase by 25 basis points from 5.55 per cent to 5.8 per cent per annum.
It comes a day after a warning from JP Morgan that investors who rely on property cashflows to meet mortgage repayments could face rate hikes of up to three per cent in the near future.
NAB chief operating officer Anthony Cahill said given strong growth in the investor segment, it was essential that NAB continued to manage its investor portfolio responsibly.
"We're committed to managing our investor lending growth in line with the regulator's guidance," Mr Cahill said.
It comes as the major banks try to keep growth in investor loans below 10 per cent, as required by the Australian Prudential Regulation Authority.

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#2 2017-03-16 02:03:57

PM
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From: Australia
Registered: 2013-09-07
Posts: 255
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Re: NAB Increases Rates

They are doing it to clamp down on strong growth. Ha ha ha ha ha
Why dont they just say no?

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#3 2017-03-16 02:08:16

Big A.D.
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From: Sydney
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Re: NAB Increases Rates

PM wrote:

They are doing it to clamp down on strong growth. Ha ha ha ha ha
Why dont they just say no?

CBA stopped approving investment loans last month.


I am the Leafy Sea Dragon.

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#4 2017-03-16 02:32:19

SilverDJ
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From: Australia
Registered: 2014-11-01
Posts: 2,528

Re: NAB Increases Rates

Big A.D. wrote:

CBA stopped approving investment loans last month.

You just need a 10% cash deposit now:
https://www.businessinsider.com.au/the- … ain-2017-3
If they actually refused all investment loans that would be huge red flag news.

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#5 2017-03-16 02:51:06

Big A.D.
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From: Sydney
Registered: 2009-10-29
Posts: 6,437
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Re: NAB Increases Rates

SilverDJ wrote:
Big A.D. wrote:

CBA stopped approving investment loans last month.

You just need a 10% cash deposit now:
https://www.businessinsider.com.au/the- … ain-2017-3
If they actually refused all investment loans that would be huge red flag news.

http://www.news.com.au/finance/money/in … f515cb72f5

THE nation's largest lender, Commonwealth Bank, has made a drastic move to put the brakes on investment lending.

In a decision that is set to see many other lenders industry wide follow, the bank announced today it would be stopping the acceptance of any new refinance applications for investor loans from Monday February 13.
...
"To ensure we continue to meet our commitments, from Monday 13th February we will be suspending the acceptance of new refinance applications for Investment Home Loans, until further notice," it said.
Commonwealth Bank has made a drastic move to put the brakes on investment lending.

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

However applications that are not refinances for investor and owner occupier loans will not be impacted.


I am the Leafy Sea Dragon.

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#6 2017-03-16 03:04:05

Bullion Baron
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From: Adelaide
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Re: NAB Increases Rates

CBA only stopped refinancing investors loans, still accepting new applications. Probably hitting APRA limits and needed to take their foot off the gas, will only be temporary.

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#7 2017-03-17 02:52:46

PM
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From: Australia
Registered: 2013-09-07
Posts: 255
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Re: NAB Increases Rates

Another raise. Westpac this time. Are the banks seeing something?

http://mobile.abc.net.au/news/2017-03-1 … es/8364196

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#8 2017-03-17 03:16:35

Killface
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From: Nunya
Registered: 2016-01-06
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Re: NAB Increases Rates

Bullion Baron wrote:

CBA only stopped refinancing investors loans, still accepting new applications. Probably hitting APRA limits and needed to take their foot off the gas, will only be temporary.

Looks to me like they just want to prevent existing borrowers changing to more advantageous terms.  Most likely to stop people switching to fixed rate loans in the expectation of rising interest rates, I would suspect.


All that glitters is not gold...
...but all that is gold glitters!

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#9 2017-03-17 03:26:08

Bullion Baron
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From: Adelaide
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Re: NAB Increases Rates

You wouldn't typically need to refinance to fix your rate HMT.

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#10 2017-03-17 03:41:23

BuggedOut
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From: New South Wales
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Re: NAB Increases Rates

PM wrote:

Another raise. Westpac this time. Are the banks seeing something?

Borrowing costs are up after the US raised rates this week?

Aussie banks are really just an extension of US banks aren't they?  There is a funky image floating around showing the ownership relationships between US and Aussie banks.  Wonder if someone can find it.

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#11 2017-03-17 04:05:59

SilverDJ
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From: Australia
Registered: 2014-11-01
Posts: 2,528

Re: NAB Increases Rates

HoldMeTender wrote:
Bullion Baron wrote:

CBA only stopped refinancing investors loans, still accepting new applications. Probably hitting APRA limits and needed to take their foot off the gas, will only be temporary.

Looks to me like they just want to prevent existing borrowers changing to more advantageous terms.  Most likely to stop people switching to fixed rate loans in the expectation of rising interest rates, I would suspect.

That's likely, as I doubt many people were going fixed when they saw the rates continually dropping, and negative in other countries etc.

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#12 2017-03-17 04:17:56

willrocks
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Re: NAB Increases Rates

Why not just stop interest only investment loans.

If you can't afford to pay principal and interest, you have no business inflating the money supply we are all forced to use.


"You can ignore reality, but you cannot ignore the consequences of ignoring reality." - Ayn Rand

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#13 2017-03-17 04:51:55

Bullion Baron
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From: Adelaide
Registered: 2009-09-14
Posts: 7,298
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Re: NAB Increases Rates

SilverDJ wrote:

That's likely, as I doubt many people were going fixed when they saw the rates continually dropping, and negative in other countries etc.

As above, not typical you'd need to refinance to fix your interest rate.

willrocks wrote:

Why not just stop interest only investment loans.
If you can't afford to pay principal and interest, you have no business inflating the money supply we are all forced to use.

What about those who can afford it (the banks calculate serviceability based on P&I repayments), but also have a PPOR loan, so makes more financial sense to pay down that before paying principal on an investment loan?

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#14 2017-03-17 05:15:22

Killface
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From: Nunya
Registered: 2016-01-06
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Re: NAB Increases Rates

Bullion Baron wrote:

You wouldn't typically need to refinance to fix your rate HMT.

Oh OK, I'm on my first mortgage and I think we would have to but probably because of the structure of the loan, with three loans across two properties and two borrowers.

Should look into it again before it's too late, unless it already is sad  Pretty sure our lender will raise rates again despite no change from the RBA.  They did in January, 'just' 0.06% but without an increase in the official rate.  Testing the waters I guess.


All that glitters is not gold...
...but all that is gold glitters!

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#15 2017-03-24 03:02:00

SilverDJ
Member
From: Australia
Registered: 2014-11-01
Posts: 2,528

Re: NAB Increases Rates

Commbank just tweeted that they are raising variable rate investment loans by 0.24% to 5.8% on 8th May
Interest only rates will also rise by 0.25% for both owner and investors.
Owner rates will rise only 0.03%

The low interest rate party seems to be over. It's only a matter of how fast and how much they'll rise....

Last edited by SilverDJ (2017-03-24 03:03:41)

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#16 2017-03-24 03:09:17

BuggedOut
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From: New South Wales
Registered: 2015-07-21
Posts: 1,777
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Re: NAB Increases Rates

SilverDJ wrote:

Commbank just tweeted that they are raising variable rate investment loans by 0.24% to 5.8% on 8th May
Interest only rates will also rise by 0.25% for both owner and investors.
Owner rates will rise only 0.03%

The low interest rate party seems to be over. It's only a matter of how fast and how much they'll rise....

They need to be careful not to pop the bubble for all those over-extended home owners.  Investors are bearing the brunt of it for now....

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#17 2017-03-24 03:39:50

dagsgarrett
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From: Australia
Registered: 2010-10-26
Posts: 290
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Re: NAB Increases Rates

Just my opinion call me cynical but I wouldn't be fixing a mortgage rate as it appears this is what they are trying to accomplish, get as many people to change to a fix mortgage in case bubble does pop.

Better to have someone fixed at 3% then a variable rate of 0.5% to 1% wink


You can THINK as much as you like but it's the DOING that counts!

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#18 2017-03-24 04:31:47

Ipv6Ready
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From: North Sydney
Registered: 2016-01-08
Posts: 2,214
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Re: NAB Increases Rates

dagsgarrett wrote:

Just my opinion call me cynical but I wouldn't be fixing a mortgage rate as it appears this is what they are trying to accomplish, get as many people to change to a fix mortgage in case bubble does pop.

Better to have someone fixed at 3% then a variable rate of 0.5% to 1% wink

Are you Bill Gates, where are you Getting fixed at 3% and variable at less than 1%?

Banks don't care if the loan is fixed or variable, when they foreclose you?

Austrian banks are small fry, if you fix your mortgage rates, they will acquire fix rates for you at wholesale rates.
Therefore if you have to pay a break fee so will the banks.


This is why Reserve Banks official rates are just a farce.


WTB 4 to 6 grams of pure gold. Don't care if it is coin, bar or granules. Near spot, suits anyone who has been tempted to open a certicard or just have some granules to make a ring

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#19 2017-03-24 04:47:35

Big A.D.
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From: Sydney
Registered: 2009-10-29
Posts: 6,437
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Re: NAB Increases Rates

Ipv6Ready wrote:

This is why Reserve Banks official rates are just a farce.

They're not exactly a farce, they're simply the rates you pay when you can't get a better one elsewhere.

If you're not getting your money from the RBA, it doesn't matter what the RBA is charging or whether "official" rates go up or down (something articles like this completely miss).


I am the Leafy Sea Dragon.

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#20 2017-03-24 04:50:01

SilverDJ
Member
From: Australia
Registered: 2014-11-01
Posts: 2,528

Re: NAB Increases Rates

BuggedOut wrote:

They need to be careful not to pop the bubble for all those over-extended home owners.  Investors are bearing the brunt of it for now....

I have no pity for people who over-extended themselves on debt and get into trouble, home owners or otherwise. They could have bought cheaper but elected not to, their choice.
And before anyone craps on about average prices etc, most people are not forced to buy the home they are in at the price they paid, there is almost always a cheaper option in another (usually less desirable) location. But you know, everyone must be near that coffee shop they like roll

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#21 2017-03-24 08:45:25

PM
Silver Stacker
From: Australia
Registered: 2013-09-07
Posts: 255
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Re: NAB Increases Rates

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#22 2017-03-24 09:05:51

House
Moderator/ Legend
From: Stack City
Registered: 2012-04-30
Posts: 9,635
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Re: NAB Increases Rates

willrocks wrote:

Why not just stop interest only investment loans.

If you can't afford to pay principal and interest, you have no business inflating the money supply we are all forced to use.

Who said IO is only for those who can't afford P&I? One of the smartest things anyone can do is go IO.


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"There's no point in paying a mortgage on an asset that is going to fall by 40 per cent or so in the next few years". Steve Keen, 2008.
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#23 2017-03-24 10:35:11

JulieW
Silver Stacker
From: Australia
Registered: 2010-10-14
Posts: 11,101

Re: NAB Increases Rates

House wrote:
willrocks wrote:

Why not just stop interest only investment loans.

If you can't afford to pay principal and interest, you have no business inflating the money supply we are all forced to use.

Who said IO is only for those who can't afford P&I? One of the smartest things anyone can do is go IO.

I'm interested to see your arguments on why you think this House....

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