IMPROVED CHANGES TO BORROWING CAPACITY
For more detailed mortgage information contact our in-house Mortgage Broker, Mike Ruiz from Loan Market 0411490382
Recently, some of the big banks have announced that they are taking steps to make it easier for investors to buy properties by changing their lending rules, including an increase in the maximum loan-to-value ratio for interest-only investor loans.
Investors taking out an interest-only loan will now be allowed to borrow as much as 90% of their target property’s value, reducing their deposit requirement to 10%.
This change will apply to new purchases, refinances, and loan variations.
Borrowers switching from principal-and-interest can also take advantage of the lowered deposit requirement. However, borrowers will need to adhere to the current switching policy and will only be able to switch to interest-only repayments post 12 months of loan drawdown.
They also announced changes to Household Expenditure Measure (HEM) calculations. Referrals to a separate credit review will no longer be required in instances where expenses are higher than 130% of HEM.
It is expected that these changes will deliver faster turnaround for loan approvals.