Pants pooing has become a common pastime for specufestors:
Over the past week, four separate lenders have announced their exit from the SMSF lending space, with a further two banks saying loans will no longer be offered to SMSFs.
Westpac announced that effective 31 July 2018 it would no longer offer property loans to SMSFs for both residential and commercial properties.
This followed an earlier announcement from its subsidiary St.George that it will withdraw its SMSF loan products from sale effective 31 July 2018.
Westpac Group confirmed to InvestorDaily sister title Mortgage Business that the removal of SMSF loans for both residential and business properties will be applied across all of the brands in the Westpac Group, including Bank of Melbourne and BankSA.
Commenting on the decision to withdraw all its brands from the SMSF lending space, Westpac stated that the bank “continually reviews its products to ensure we meet the expectations and requirements of customers”.
“To streamline our product offering, effective Tuesday, 31 July 2018 applications for new consumer or business lending will no longer be accepted for SMSFs,” Westpac stated in a public release.
The borrowing market has been getting tougher for SMSF trustees for several months, especially with loan to value expectations, as foreshadowed by specialist brokers like Thrive Investment Finance’s owner Samantha Bright last year.
Most recently, Ms Bright said off-the-plan purchases are becoming increasingly difficult to finance, with lenders either refusing applications for properties that are less than six months old or requiring stronger assets than normal to back their loans.
WBC has been a bulwark of investor mortgage lending:
No more!
Meanwhile, at Banking Day comes Goldman:
BoQ announced on 25 June that it was hiking variable rate mortgages for owner occupiers by 9 basis points while investors would incur increases of 15bps.
Number crunching by Lyons indicated that each of the regionals stand to thicken their net interest margins by 5 basis points.
The relatively high exposure of Bendigo and BoQ to mortgage lending means that such margin improvements could boost the earnings per share of both banks by more than 5 per cent.
The Goldman Sachs’ number crunching suggests Westpac would be in line to derive the biggest earnings uplift within the cohort of big banks in the order of 3 per cent, with the other majors likely to each derive earnings boosts of around half the level the regionals.
Lyons estimated that the rise in wholesale funding costs has wiped up to 3 bps from the net interest margins of the major lenders.
Still more tightening to come.
