All the more reason to use different banks for different properties…
Banks and multiple house owners have been given more time before implementation of new rules on treatment of loans to residential property investors
June 13, 2014
Banks and multiple house owners have been given more time before the Reserve Bank introduces new rules on the treatment of residential loans to investors with several properties.
The decision to defer introduction of the rules, which apply to investors with five or more properties, from July 1 to December, comes after opposition from banks.
The rules could have implications for the ‘risk-weighting’ applied to banks’ lending for investment properties – given that residential property loans have a much lower risk-weighting than commercial loans.
Also, the rules may likely lead to more expensive loans for investors with several properties, since they may have to pay higher rates of interest.