CBA hikes on specufestors again

Via Martin North:

Today the CBA has announced changes to some mortgage rates: interest only home loan rates for investors will rise by 12 basis points and Viridian Line of Credit (VLOC) products will increase by 4 basis points. The new interest only standard variable rate for investors will be 5.68% per annum, VLOC will move to 5.82% per annum.

These changes will be effective from 3 April. For customers who may want to switch to principal and interest repayments to avoid this increase, they can do so easily – online, over the phone or in branch – at no cost.

CBA supported 140,000 new home loans in the six months ended December 2016 and our standard variable rate (SVR) for owner occupiers of 5.22% per annum remains the lowest among the major banks.

They just released their 1H17 results, which show a statutory net profit after tax (NPAT) of $4,895 million, which represents a 6 per cent increase on 1H16 period. Cash NPAT was $4,907 million, an increase of 2 per cent on the prior comparative period. Return on equity (cash basis) was 16 per cent.

Strikingly though the net interest margin was down 4 basis points to 2.11%, or 2.08% excluding treasury, down 5 basis points.

CBA-IH17-NIM

 

 

Comments

  1. Falling Net Interest Margin will increase pressure for CBA to pass through more increases in overseas funding costs.
    Higher US interest rates, loss of the AAA credit rating this year could be a shock in this regard.
    Not pretty for those on the edge already.

      • There are not enough deposits in Australia to cover lending. They are exposed to international credit markets. That is where the money comes from. Ergo, international money costs go up -> Australian mortgage prices do also.

  2. To anyone that may be interested,They can take your house form you,you can lose your family and the bank can bail in your money but they can’t take away the food you have eaten nor the memories you have so to all those RE investors that may have sacrificed holidays etc now is the time to pull back and not do without.
    First out best dressed

    • Rubbish! Investors work hard to scrimp on everything from taxes to toilet paper. This is why we become rich in multiple properties and get better relations. We don’t need frivolous things like “experiences”. We live every moment for the next property. This is all we need to be happy. Our memories are filled with beating plebs at auctions! And this will never ever end, we will continue to add value to our lives through property while the non-players stay poor because of their frivolity!

      • I can imagine the Euphoria of winning an auction and smashing that first home buyer into the dirt with their pathetic bidding strategies.. Limits are for home buyers. Investors have no limits because they know tomorrow the property is worth more than today.

  3. [email protected]

    It will get harder and harder to get money out of China with a distinct possibility of orders of repatriation.Together with lenders starting to soil their pants, this is shaping up to be another BIG SHORT!

    http://www.theaustralian.com.au/business/financial-services/kpmg-warns-of-chinese-property-defaults/news-story/469b110110df2db41f5b6e5a6f064e10

    • first order thinking paully, now moving onto the 2nd order what direction do you reckon this signals going forward? what is the correlation of a move in interest rates when regressed against the previous one/two/three moves? (hint: close to +ve 1)
      what view of this move in the light of Yellen’s hawkish testimony overnight ?
      lets not delay the collapse/correction any further

      • Agreed hence the “Not the end of the world..just yet…” comment. probably APRA’s controls are starting to kick in so they are upping their investor IO margins to make up for the skinny PI margins. or maybe it’s just risk management from CBA’s side.
        I’m positive we will see many more smaller hikes on IO only loans so investors will loose more but they still have negative gearing to rely on if they are on it.
        As for Yellen’s hawkish, we will have to wait and see. The US is deeply divided and that can have bad consequences on the economy…

  4. [email protected]

    Remember the song?
    chain, chain, chain……….chain of fools

  5. [email protected] me, must be nearing the end now, the bears are beginning to capitulate.

    • Yep, I’ve long been a bear, but am now actively considering a purchase, for the sole reason that I’d like to plant a small orchard. It’s hard to have a garden of your own under the terms and conditions of a rental contract. Fortunately I’m in Darwin and prices are plummeting! So it’s a good time to throw in the towel relative to say, 2014.

      • Go forrit Locus. Get your orchard, if your space is not big enough look at the grow bags (Daley’s sells them online) and the Field guy’s research… smaller root ball and proportional productivity increase. Used in citrus and cherry orchards. Can be buried if you have well drained soil. I am desperate to get a decent backyard plus home for the same reason. Adapt 30 on youtube.. If we get more big wind activity in the next 10 to 15 years I would not want mango trees .. seen cyclone take huge ones off at the kneecaps in my backyard in Fiji. Growing your own food is going to be important quite soon. Small farms, backyards.

      • Locus of Control

        Thanks for the encouragement glo – it’s appreciated.

        I’ll look into your tips and hints (Daley’s etc.).

        I agree – with the world’s population burgeoning and given the woeful state of the environment caused in no small measure by humans’ unsustainable farming practices, there has never been a more apt time to learn how to sustainably produce your own food at home. I’m aiming for a mix of non-native and native food plants. Our native food sources are under-appreciated if you ask me, but that’s a topic for a non-MB forum…

    • Have almost capitulated for the sole reason of dealing with property managers.

      After moving due to disputes, we’re already in dispute with the new property manager.. Moved into new house, light fittings not working and bedroom unusable.. Property manager lying, stalling and refusing to action anything.

      I honestly think at times renting is a big conspiracy to coerce people into buying.

      • Don’t capitulate – – kick up –go directly for a Court hearing –it’s free & can be expedited for a quick resolution.
        Hope you’ve got a lease. There are State Govt protections in place for Renters. Don’t be bullied -go for the balls.
        After 14 years of renting (voluntarily) & 5 separate leases I can empathise with you re Property Managers. Most are self serving a$$holes.

      • I agree with @AuRules, take ’em to the tribunal. At best, you’ll get some action from the property manager and/or a rent decrease. At worst, the hassle will make them think twice about treating other tenants the same way.

      • Is there a way to go quickly through the courts without significant cost? Having gone through the Tribunal (NCAT here in NSW) process before — it’s a bureaucratic joke. It takes 6 – 8 weeks for an initial group list hearing where conciliation occurs. From there, you’re looking at least another 6 – 8 weeks before a proper Tribunal Hearing..

        The Tribunal is extremely limited in scope (and yet acts as a kangaroo court of sorts — making up processes / shit on the spot, and does not seem very well regarded in the legal community), and seems aimed at going after the landlord. I’d rather go after the rent-seeking middleman property managers. In most cases (personally), it seems the property managers are the culprit — not passing on information, and playing the tenant & landlord off against one another..

        The next best option seems to be lodging a complaint through Fair Trading. I’m not just interested in having property managers do their job — but in having them monitored for compliance to ensure they stop breaking the fking law, being deceitful, misconduct etc.

  6. AMP also:

    Changes to Investment Lending, Interest Only loans and Credit Policy

    Changes are effective from 16 February 2017 for all new loan applications.

    Investment property loan refinances
    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. Refer to the FAQs for more information.

    Interest Only loans – changes to variable interest rates
    The variable interest rates for:
    – Investment Interest Only products are increasing by 0.30% pa.
    – Owner Occupied Interest Only products are increasing by 0.30% pa.

    Principle & Interest Investment property loans – changes to variable interest rates
    The variable interest rates for:
    – Investment Principle & Interest products are increasing by 0.25% pa.

    Credit Policy changes
    LVR – The maximum LVR for purchases of investment property loans is reducing to 70% (including LMI).

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