Not all banks or lenders are in the same boat. Three of the four big banks are above the 10 per cent threshold and are looking to reduce their investment lending, and some second-tier banks are only at the four per cent mark, meaning they are looking to ramp-up their lending.

Their current position in relation to the 10 per cent mark dictates their inclination to approve or decline loans at the moment, so if your bank is giving you a hard time, it’s not you, it’s them.

Other lenders who are not regulated by APRA do not need to abide by the 10 per cent cap and so are looking to expand their book.

Another issue is the massive difference in loan amount the “adjustments” to the servicing calculators are making.  An example was a loan which was pre-approved for $600k last month with a bank, whereas now they can only afford $530k.

This can have a significant impact on pre-approved clients or, more specifically, clients who are buying off the plan as they may no longer be able to afford to buy the properties.  The impact to developers who are approaching the completion of projects and settlement on apartments will also be an issue as their purchasers may not be able to obtain the loans to settle.

The situation may get even tighter if APRA extends its suggested investment caps to the mortgage insurers, as this may effectively cap all investment loans to 80 per cent.

There are still many options available at this time, but you are encouraged to contact Master Builders Financial Services on (03) 9411 4555 to assess your situation.

Chocolate Money t/a Master Builders Financial Services Australian Credit License – 387277

Disclaimer: Please note that the information provided in this article is not to be considered specific advice of any sort as your situation has not been taken into account.  It is general in nature and purely represents the view of the author.