AMP Bank will stop writing new loans to property investors and is jacking up interest rates for existing investor customers sharply – the most dramatic bank response so far to a clampdown on lending to landlords.

AMP on Wednesday said it would increase variable interest rates for all its investor borrowers by a hefty 0.47 percentage points, significantly more than recent rate rises from its larger rivals. The rise will increase the rate on a "basic" loan to 4.97 per cent.

More drastically, AMP will also cease accepting or assessing new loans for property investors from now on. It expects the freeze on new lending to continue until later this year, "depending on market conditions".

Both moves are in response to the Australian Prudential Regulation Authority's requirement that housing investor loan growth not exceed 10 per cent, AMP said.

"We appreciate the position this puts our customers in, and will be working with our distribution network to actively communicate with them," AMP Bank managing director Michael Lawrence said in a statement.

A spokesman said the move to cease new lending to investors was an "interim measure in response to regulator guidelines to limit growth in investor property lending across the market to 10 per cent".

The rate rise will also make AMP's loan book more profitable – with the bank's earnings accounting for about 10 per cent of total group profits.

Veteran banking analyst Brian Johnson, from CLSA, said he had not seen a bank so publicly shut down lending to one group of customers, although some had previously closed lending in several segments without formally announcing it.

The move to shut the door to new customers comes after Commonwealth Bank and ANZ Bank last week raised investor interest rates by 0.27 percentage points, also citing APRA's policies.

National Australia Bank on Monday raised rates on interest-only loans by 0.29 percentage points, and analysts expect Westpac will also raise some rates, even though its loan systems have so far prevented it raising borrowing costs for housing investors only.

Mr Johnson said the regulatory action against banks was occurring at a time of record-low interest rates and very high rates of household indebtedness – which he described as "a very dangerous combination".

AMP Bank is a relatively small lender in the market, with 100,000 customers, many of whom are clients of AMP's larger financial planning arm.

Its housing investor loan book is worth $2.9 billion, giving it a market share of less than 1 per cent in investor lending.

The decision to close new lending took some observers by surprise, as the latest official figures show there are banks growing faster than AMP, which expanded its housing investor loan book by 13 per cent in the year to May.

This is faster than APRA's 10 per cent speed limit but slightly slower than the pace of growth at its much larger rival, NAB, where investor loans grew by 13.9 per cent in the year to May. Macquarie Group's investor loan book has swelled by 33 per cent since the start of this year.

CBA equities analyst Victor German said it was not clear what had forced AMP's decision. "I would not see AMP's decision as a read-through for the sector," he said.

Source ：http://www.smh.com.au/business/banking-and-finance/amp-bank-stops-lending-to-housing-investors-jacks-up-rates-20150729-gimqjt.html