In the past few months APRA, the regulator of how much money the banking industry needs to keep to prevent it from collapsing, has stressed it’s strong concern for the amount of money the Big Banks have stored. Strangely enough, the regulator things they dont have enough!
This means they now have increased their interest rates on many loans, the assumptions they use when considering rental returns and future interest rates rises and the deposits some will need. In all, there have been many changes within most lending institutions and some have even stopped lending to some groups, such as investors, altogether.
Interest rates are still at or near historic lows, but the Banks have found new ways to ‘skin the cat’. It’s time for a review.