Teachers Mutual Bank has temporarily withdrawn from new investment home lending in an attempt to curb growth in this part of its portfolio and meet APRA requirements.
“We have been working closely with the regulator to manage the growth of our investment lending portfolio,” Steve James, CEO of Teachers Mutual Bank said.
In December 2014, APRA required that all financial institutions limit their investment lending growth to 10%. According to the banking regulator’s latest monthly banking statistics, Teachers Mutual Bank grew its investment portfolio by three times the limit in the 12 months to March 2016.
“The strong demand from our membership base has meant our investment home loan growth has not slowed in line with our expectations, despite the Bank applying a number of micro-policy and pricing disincentives during 2016,” James said.
“In any other context, the strong demand for our investment loan products would be very pleasing, but we take our responsibilities to the regulator extremely seriously, so we have proactively made the decision to temporarily withdraw from investment home lending to new business, effective Wednesday 25 May 2016.”
However, the mutual lender has announced new rates for its three, four and five-year fixed rate owner occupier home loans.
The three-year fixed rate is now 3.74%, whilst the four and five-year fixed rates are both 3.99%.