Preventing a pop, thoughts on new regulations and how they affect you

You would have to be living under a rock if you had not noticed the escalating prices in the property market over the last three years-in fact the market has grown a whopping 29%-This rapid growth is spurring concern from our regulators of a price bubble.

What you may not know is what the banks and regulators are doing to prevent the “bubble” and how it affects you:

1. Banks have reduced the discount offered to new investors to discourage new lending

2. Tightened up the new lending credit criteria, making it harder for clients to qualify

3. Increased existing variable rate to investment loan clients.

What this means for you?

1.If you are an investor-owner, for the first time since 1997, you will pay more than owner-occupiers on mortgage.

2.You may receive a smaller loan relative to the price of your house.

3.Bottom line, you will find it harder to get a loan.

Daniel Pym a mortgage broker and financial adviser at loan market, “My personal opinion is that the banks are profiteering by increasing existing investment clients rates.”