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Following the recent tightening of investment lending policies, some lenders are now incorporating blended rates as a way of once again offering investors a more competitive interest rate.
The repricing of investor loans in recent months has made it more difficult for consumers to get an investment loan. Lenders were unwilling to discount investment loans, but now with blended rates, discounted investment loans seem to be returning.
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Blended rates give consumers with an owner-occupied loan and an investment loan the opportunity to approach their lender for a better deal.
Following the initial tightening of investment lending policies, lenders are now taking into consideration the relative security of a loan, or loans, if a consumer has both an owner-occupied loan and an investment loan – with some believing that their customers should be eligible for a blended rate if they have both. In most cases, this blended rate is higher than a regular owner-occupied rate but lower than the standard investment rate.
Brokers should make themselves aware of which lenders are offering these blended rates, as there can be significant savings for clients who refinance. It may now be the case that it is worthwhile for a client to have all of their loans with one lender to access a better deal with a blended rate.
At 1st Street, we view this as a great opportunity to review our clients' accounts, identify eligible clients and make them aware of the possibilities, and this is something all brokers can do as a duty of care to clients.
