A major bank has cut the rate on its base variable rate special offer for investors to well below the industry average.
NAB’s new reductions have brought its rates down to 3.09% for principal and interest loan repayments and to 3.29% for interest only repayments, revealing its current appetite for property investors.
According to Canstar group executive of financial services, Steve Mickenbecker, the major’s latest move is a sign the bank is aiming to “entice investors”.
“The housing market has been in the doldrums and new lending to investors in particular is even lagging [behind] the owner occupied market, leaving lenders competing hard for the quality business that is available,” he explained.
“With new investment demand flat, the race is on for market share of the refinance market, and investors are a tried and tested group being targeted by lenders.”
According to a recent Canstar survey, the average variable rate investors are currently paying is 4.06%.
“Investors have been paying a premium on the rates paid compared to homeowners, but the gap is narrowing and better deals are available today,” said Mickenbecker.
“With investors saying they are paying rates around 4.06%, it’s time they looked at refinancing. The lowest variable rate in the market for investors right now is almost 1.5% lower at 2.59% and the lowest fixed rate is down to 2.29%.”
Canstar’s database showed 16 lenders made cuts across 38 investment variable rates since July 1. However, while data from the Australian Bureau of Statistics (ABS) revealed an 8.1% rise in the value of new loan commitments to investors over June, the figure remains down 6.1% year on year.