Half a percentage point enough to tempt investors to new lenders

More than a third of investors would consider refinancing to a new lender to secure only marginally better interest rates, according to new research.

The 2020 PIPA Annual Investor Sentiment Survey found about 36 per cent of investors would consider moving their portfolio to take advantage of interest rates just half a percentage point lower than their existing home loans.

PIPA chair Peter Koulizos said the survey result made it clear investors were on the hunt for better home loan deals, especially in the present environment of historically low interest rates.

“Investors have had to pay unfairly high interest rates ever since they were nnecessarily targeted by APRA a number of years ago.

“Investor and interest-only interest rates have reduced over recent times but are still significantly higher than owner occupier home loans.

“Many investors are also coming off fixed rates and are refinancing to obtain rates that are one or, sometimes, two percentage points lower than what they had been paying.”

The survey also found 65 per cent of investors would consider refinancing for an interest rate differential of up to one percentage point.

Mr Koulizos said lower interest rates significantly improved investor cash flow, which have been under pressure over the past six months.

The survey found more than 16 per cent of tenants had asked for a rent reduction or holiday during the pandemic.