Global Financial Services director Ajay Kumar says he hasn’t found the banks’ pricing to be a problem or there to be a gap between rates for investor and first home buyers.
LoanPlan broker Christine Lockie recently noted
she was seeing interest rate margins of approximately 0.68% added to funds required for investment property purchases and it wasn’t fair to mum and dad investors.
Lockie pointed out the higher margins equated to approximately $1,360 per annum on every $200,000 borrowed.
However, speaking to NZ Adviser
, Kumar said, “My opinion is, it’s not true that banks are charging 0.68% higher rate of interest. We are able to negotiate for our customers almost similar rate of interest even if they are an investor or first home buyer.
“We are getting good pricing –when the risk factor is higher, of course they do charge some margin but only when risk factor is high.
“I have not seen any bank so far which says that I will charge you 0.68% more for investor than a first time home buyer or owner occupier property.”
Eighty percent of GFS’ client base is mum and dad investors, Kumar says often their current home has enough equity to support their investment in another property.
“If they are having enough equity in their property, they are using that equity to buy an investment property – in many cases they are not giving any deposit because they have existing equity enough to support the investment property.”
Kumar however agrees with Lockie that the recent LVR restrictions are making an impact, with many of their clients property-hunting in Hamilton.
“40% LVR is making an impact now,” he says. “Whether it’ll be long-term, permanent or not is unclear at the moment, but the 40% LVR is having some impact in the market and in the prices of the houses – not only in Auckland but outside Auckland also.”