Articles by Salesh Chand
As many investors will already know, banks have been steadily tightening their lending criteria, making it more challenging to borrow. And soon, when the new capital requirement rules for banks come into effect next year, this is only going to get harder.
Capital requirements for the major banks will be increased from 10% to 18% over the next seven years, meaning they will collectively need to raise and hold an extra $20 billion. That’s $20 billion less that they can lend to businesses and investors. The increased capital requirements are expected to result in a rise in interest rates of between 20–40 basis points (0.2%–0.4%).
So what does this mean for business owners and property investors?
To minimise the effect this will have on your ability to borrow money, you need to get your financial affairs in order. And you need to do this now, not later. We suggest the following strategy:
In summary, the new rules will make it harder for investors and businesses to borrow, but there are things you can do now to reduce the impact this will have on you. However, you’ll need to act fairly quickly. Contact your mortgage broker for more advice. (We recommend Kris Pedersen Mortgages - you can contact them here.)
Thanks Janet. I also want to say thank you so much for your books. I started reading Money Secrets last night - I have been wondering why I just haven't been dealing with stuff and been so stuck lately and your writing is bringing some clarity. So I will be shaking off the Rabbit ears and Ostrich feathers! -- and giving copies of the book to my nephew and niece. Cheers, Sue - Sue Pickernell-Crow, October 2018
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