Investment Lender of the Year
Property values are expected to fall, but low interest rates on loans will support the long-term investor
Police Bank has knocked off last year’s winner, Newcastle Permanent, to take out Investment Lender of the Year. Property investors have been hit hard by Covid-19. While they’ve been able to take advantage of a fall in rates, this has been offset by a widespread slide in rents and the prospect of falling real estate values.
“With the uncertainty around the economic outlook clouding the outlook for property prices right now, and with a real chance that they fall five or 10% before stabilising, investors are a little more wary than they were at the tail end of 2019 in the wake of the RBA cuts,” says Police Bank chief executive Greg McKenna.
“But the reality is that as long as investors are discerning in terms of targeting an area or property they are interested in, know the metrics driving their decision to invest in that property and take a long-term view, then the low-interest-rate world that’s likely to persist for an extended period post-Covid will be property investment supportive.”
There’s always a silver lining, too. Our lives have moved online and this has become a key point of differentiation for those seeking investment loans.
“Jeff Bezos and smartphones have revolutionised banking and the trend to digital interactions, and it feels like Covid-19 and the lockdowns have accelerated that trend even faster,” says McKenna.
He believes that good service means meeting customers where they want to be met.
“Some customers will want to use our Police
Bank branches, but more often than not our members want a digital offering or over-thephone app, using the internet combined with the personal touch of our mobile banking force and relationship managers.
“Our branches are open and the mobile team will be back on the road or increasingly on Zoom to meet with customers and members when and where they want to be met,” says McKenna.
Police Bank currently offers two home loan investment options, both with a variable rate of 3.34%pa and fixed rates from 2.99%pa. The two options vary with their features list – for example, the Customs Value Home Loan has an offset facility and the ability to split the loan between fixed and variable.
Second-placed IMB Bank offers variable, principal and interest (P&I) investment home loans from 3.18%pa, with a 100% offset account included. Its fixed rate for one-, three- and fiveyear terms is 2.74%pa and you can be in advance with your loan repayments for up to 12 months without penalty.
In third place is P&N Bank. Its cheapest variable investment loan starts at 3.33%pa with a redraw facility and the option to make interest-only payments for the first five years. Its cheapest fixed-rate loans start at 2.79%pa for a two-year term, but only if your loan-to-value ratio is less than 80%. There are also one-, three- and five-year fixed-rate terms, so it’s best to do your homework on the most cost-effective option.