Lending has already tightened up due to two components: 1. APRA lending standards 2. Banking Caps on Investment Lending For those with Investments they will find it very difficult (Compared to previous years) to both refinance & extract equity for existing investments. On the chance that you do refinance, generally the rates will be significantly higher & they may not give an option to go IO. I believe banks are in a very difficult situation ATM with balancing the cost of lending (especially as the Us raises their rates & short term lending costs for Australian banks go up) with increasing rates in Australia & potentially triggering mass defaults. Interesting times ahead...but one thing is for sure, there will be pain as interest rates rise & those that borrowed to invest feel the pinch. All IMO!
