The Commonwealth Bank is freezing new lending to property investors looking to switch banks.
This means property investors can’t refinance their investment loan with CBA for a lower rate. It’s a move designed to slow strong growth in CBA’s lending to property investors.
Loan refinancing makes up about a third of new lending activity, so CBA is effectively closing the door to a significant amount of new business.
APRA is the banking regulator and they have a 10% “speed limit” on how quickly banks can lend to property investors. Economists say property investors have driven much of the rapid price growth in Sydney and Melbourne in recent years. So the APRA rule has caused banks to regularly change their lending policies for investors. All banks have already increased the interest rate and fees for investment loans.
The CBA change will not stop new lending to existing customers who already have an investment loan with CBA.
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