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AMP Bank has today (30 July) launched a new investment property loan that offers investors terms of up to 40 years – with up to 10 years of interest-only (IO) repayments available with no reassessment.
Investor borrowers with a loan-to-value ratio (LVR) of 80 per cent or below can choose to borrow $100,000 and above and take an interest-only period of 6–10 years. The interest rate for the IO period starts from 6.54 per cent per annum (6.85 per cent comparison) for those with an LVR of 60 per cent or less, and 6.59 per cent (6.88 per cent comparison) for an LVR of 80 per cent or under.
The principal and interest rate is 6.39 per cent per annum (6.80 per cent comparison) for all LVR brackets up to 80 per cent. Serviceability is assessed on a maximum 30-year loan on a principal and interest basis and borrowers will be assessed on exit strategy.
Offset and redraw functionality are also available.
The Equity Flex product, which has been under broker pilot for the past few months, is now being launched to the broader market.
The bank said it has launched the loan as investors consider how they manage cash flow following the federal budget’s changes to negative gearing and capital gains tax, and ongoing cost-of-living pressures.
It noted that many investors are considering the long-term impact of the tax changes and how it impacts their cash flow management, with more investors looking for repayment flexibility.
AMP said that Equity Flex gives investors greater certainty (given they can lock in an interest-only period of up to 10 years with no reassessment), increased capacity to leverage existing equity, and aims to help them hold property investments over the long term.
Speaking to Broker Daily, Sean O’Malley, the group executive of AMP Bank, said the new Equity Flex product is a reflection of the AMP Bank team “listening to brokers and their feedback and building products to meet their needs”.
He said: “We launched a 10-year interest-only period on a 30-year mortgage last year and broker feedback was that it was great, as it gave borrowers flexibility and certainty. This is an evolution of that strategy to help investors manage their cash flow.”
O’Malley said: “Property investing has always had a long-term focus, but the budget changes and ongoing cost-of-living pressures have put an even greater premium on flow management.
“For many investors, the question is no longer just whether a property is a good investment. It’s whether they have the flexibility and financial capacity to hold that investment and maintain their strategy through changing market conditions and evolving tax settings. This includes new investors no longer having access to negative gearing benefits.
“Equity Flex gives eligible investors more options. A longer loan term and extended interest-only period can help improve cash flow flexibility, providing more breathing room and supporting long-term holding strategies.”
“As a smaller bank, we need to be challenging and delivering innovation, and so I think this is the next iteration of what’s been a pretty strong period of innovation from AMP Bank,” he said.
Michael Christofides, AMP Bank’s director for lending and everyday banking, said: “Brokers have been telling us that more investors are looking for ways to improve cash flow and strengthen their holding power, particularly as lending, tax and economic conditions evolve.
“Equity Flex was developed with those conversations in mind. Brokers wanted greater flexibility for eligible investors with strong equity positions who may be asset rich but increasingly conscious of cash flow,” he said.
“This product gives brokers another option to help clients navigate changing circumstances while maintaining a long-term investment strategy. It’s about providing flexibility and choice, backed by responsible lending standards.”
To illustrate the product’s real-world application, AMP Bank shared a scenario involving an established 45-year-old property investor who holds $1.9 million in total portfolio debt.
Looking to ease cash flow strain without inflating their total debt position, the borrower refinanced a portion of their existing portfolio debt onto an Equity Flex Loan (featuring a 40-year term and a 10-year IO window).
This freed up approximately $2,800 per month in cash flow across the portfolio with zero increase in total borrowing, providing them with a financial buffer to execute property maintenance, fund upgrades, and stay positioned for future portfolio expansions as conditions evolve.
The bank has said while Equity Flex is currently only available to investors, it will “consider” extending it out to the owner-occupier segments over time.
The Equity Flex product is the latest product to launch from AMP, which has been tailoring its product offering in recent months.
The changes come after AMP Bank re-entered residential self-managed super fund (SMSF) lending in February through its SuperEdge product, only for the government to later announce a ban on this type of lending in June. The ban takes effect from 10 August, with AMP closing all SMSF pre-approvals for its SuperEdge product at 5pm this coming Monday (3 August).
[Related: The latest lender changes at a glance]
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