Suncorp Group Ltd (ASX: SUN) is the first of the banks to lower interest rates for investor loans in housing, following the removal of the 10% annual cap by the Australian Prudential Regulation. The cap, imposed in 2014 to try and cool the overheated property market, will no longer apply to Authorised Deposit-taking Institutions on the back of improved lending standards. The cap successfully led to lower annual growth in investor housing credit. The cap of 30% on interest-only loans relative to totally new mortgages remains in place.
Suncorp, which provides banking, insurance and wealth management, is trading on forward price- earnings-ratio of 18x and is paying fully franked annual dividend of 5%.
While, Insurance Australia Group Ltd (ASX: IAG), a general insurance group operating in Australia, New Zealand and Asia, is trading on a forward PER of 19x and is paying an annual dividend yield of 4%, fully franked.
