AMP has announced it will no longer accept loan applications to refinance stand-alone investment property loans with investment property security.
Effective tomorrow, 16 February, the bank will also be increasing Investment Interest Only rates by 0.30%, and Owner Occupied Interest Only products by 0.30% per annum.
“We will no longer accept loan applications to refinance stand- alone investment property loans with investment property security. Refinances that include owner- occupied and investment properties remain acceptable, subject to security property values,” the bank said in the announcement.
Investment Principle & Interest products are also increasing by 0.25% pa, effective tomorrow (16 February).
Along with these changes the non-major has also announced notable credit policy changes. The maximum LVR for purchases of investment property loans is reducing to 70% (including LMI), while the credit card servicing rate for calculating loan serviceability will increase from 2.5% to 3% of the credit limit. This change impacts all new loans (owner occupied and investment).
“The changes announced today do not impact pipeline deals or our existing customers and there is no change for new owner-occupied principle and interest loans,” the statement said.
“These changes are being made after recent shifts in consumer behaviour and competitor activity in the property market.”
Sally Bruce, Group Executive AMP Bank commented: “We actively manage our credit policies to ensure we prudently manage risk and align with regulatory requirements.
“With sustained high levels of activity in the property market in 2017, we will continue to closely monitor developments and put measures in place to control and manage the future growth of our investment property portfolio,” she said.
AMP’s changes come following a similar crackdown on investment lending by CBA, last week.
Non-major eliminates negative gearing tax benefits
Major bank increases investor interest only rates