Can I still get a 95 Investment loan right now?
95 Investment Loan
APRA is doing its job. That is, overseeing banks and other lenders to maintain the overall health of the banking industry. However, what does that do for investors who are still looking to use a high gearing strategy, that is, get a 95% investment home loan.
In the past week many lenders have reduced their loan to valuation ratio or LVR on investment to historically low level. 80% is common as well as 90% lvr including the lenders mortgage insurance fee or LMI.
Are 95% Investment loans a thing of the past?
Smaller lenders in the market are filling this gap.This means that although widely unavailable at major banks high LVR lending is still out there in the market and available to investors who qualify.
95% investment loans are still available, however, in this current environment it is clear that borrowers have less choice than just days ago.
This gap is being filled by non bank lenders who obtain funding differently.
For the time being the non bank sector is looking to aggressively target investors in this space but we can not be sure how long this appetite will last and how much investment home loan debt they may be will to take onto their “books”.
Will a 95% investment loan cost more now?
Banks have increased the price of investment lending. More correctly they have stopped aggressively discounting investment 95 home loans to the same level as owner occupied home loans. The effect is of course the same.
Investors still have many viable options and the fact is they will probably end up paying less by being forced into a non bank loan. The can still get a high lvr investment loan if they wish and it is suitable for them.
For the time being high lvr or 95% investment home loans are still priced very well. That is, interest rate are the same or comparable to lower LVR loans. As competition in this space dries up there may be some increase in interest rates by non bank lenders.
95 investment loan strategies: If you have limited equity there are strategies we can use to increase you funds to complete. However, these strategies will depend on the individual circumstances of the investor.