With the banks raising rates out of cycle (independently of the RBA), are we likely to see, or are we already seeing rates for commercial loans or say commercial property (office, industrial, retail etc) loan margins increase also ?
Thanks for your question. Commercial and Residential loans are priced very differently.
Whilst we have had on residential loan changes to policy due to interest only and investment lending (due to government regulations) commercial lending is more focused on 90 day bill rate plus a margin.
This margin is determined by a number of factors - industry segment / loan amount / lending ratio and is priced per application in many cases.
Currently there are some commercial lenders who are being very aggressive in the market and I have not seen any immediate increase but certainly could happen especially when the US Start increasing their cash rate.
It's not a definitive answer - if only we had a crystal ball - but I hope this helps in any case!
Have a great day,
I have actually been noticing the opposite to some extent. with the APRA restrictions on lending to residential property investors money seems to be flowing over to the commercial lending divisions of several Banks. As a result the commercial rates if you factor in the discounts we are being offered have actually dropped in real terms. We are also seeing lending at slightly higher LVR's to what we have previously seen.
As they say, money never sleeps and will always find a home.
Hope this helps
In the last two weeks NAB and ANZ raised their rate/margin on a number of their commercial offerings, but we’re yet to see whether the other “big two” will follow.
Outside of the big four, we’ve seen two lenders do the reverse and drop rates on some of their commercial offerings.
Competition in the commercial space will be an interesting one to watch, according to one lender commercial is the new black!
As with home loans, its good practice to review your loans every 12 – 24 months. This doesn’t always mean you need to move banks, but it certainly helps to ensure you’re getting fair value.
Gerry Ardesi – 1800 LOANCO