Reclassified really exhibit the characteristics of an owner occupier loan,” said “Because most of the loans that have been Risk perspective, are treated as owner occupier mortgages.” One senior banking executive at a big four bank toldīankingDay, anonymously, that lenders are hoping APRA will be flexible with theĪre hoping that APRA is able to exercise discretion so that these loans, from a The reclassified mortgages, they will pass on additional costs to borrowers If the banks are forced to keep more capital to back Investor loans compared to owner occupier home loans. Signalled that it will impose significantly higher capital requirements on New risk capital framework is due to be implemented in January 2022. Home loans for investment purposes charge up to around 0.6 per cent pa more than loans for owner occupiers.ĪPRA is currently consulting with lenders about theĬapital reserves they are expected to keep against the loans they issue.

Required to hold additional funds to guard against the failure of these loans. Investor loans areĭeemed to be higher risk than owner occupier loans and banks are therefore Required to store extra capital as a result of the change. Interest rate increases on reclassified investment mortgages if the bank is Westpac is Australia’s biggest lender to residential property Having their home loans repriced at higher rates, reported this Westpac borrowers could be the most exposed to the risk of Investment loans have higher interest rates than owner occupier loansīecause the regulator considers them more risky. They aren’t being leased, are now officially classified by banks as investment Loans covering these types of properties, even if Residence of the borrower(s) only, not holiday houses and “secondary Owner-occupier loan is now defined as a mortgage covering the primary place of Tightened the definition of what is an owner-occupier home loan. Regulatory Authority (APRA), has changed the definition of investor loans and The banking regulator, the Australian Prudential The change means they could be hit with higher interest rates in the future.

Around 100,000 owner-occupier home loan borrowers have been reclassified as investors.

What does owner occupier mean