Why are lenders increasing interest rates for existing customers?

There have been a number of changes in the home loan world over the past 6 months. Some have been well documented in the media while others have been quite subtle.

Most lenders and the mortgage insurers have increased the level of scrutiny in how the determine their serviceability calculations for new borrowers. By increasing the buffer margin and anticipated monthly expenses to their calculations it means that many new borrowers are not able to borrow as much as they could 12 months ago.

For the first time in many many years, the interest rate on investment loans with some lenders is now higher than owner occupied loans.

The interest rate for interest only loans is higher with some lenders than the interest rate for principal and interest loans.

In November 2015, Westpac lead the charge of the big 4 banks by increasing their rates outside any movement from the Reserve Bank.

Even this year a number of lenders have quietly gone about increasing their rates.

So what does this all mean?

In this podcast, we speak to one of the best mortgage brokers in the business, Jeremy Fisher from 1st Street Home Loans