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ANZ 90pc LVR cap concern for industry

Staff Reporter 2 minute read

Brokers are still digesting the news that ANZ has cut its maximum LVR from 95 to 90 per cent as concern mounts over the connotations for the industry.

According to an ANZ spokesperson the bank made the change on Monday in response to weaker economic conditions forecast for 2009.

The wobbling economy, international financial pressures and the softening of the property market has already led some lenders to tighten criteria on 100 per cent products.

CBA was the latest to act, removing its 100 per cent products altogether and capping its LVR at 95 per cent.

Westpac, NAB and St George continue to offer 100 per cent LVR loans however a NAB spokesperson told Mortgage Business that its high LVR lending criteria was under review with some risk-based adjustments anticipated in the near future.

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A St George spokesperson said the bank’s products were constantly under review however it “had no announcements at this time”.

There are industry fears that the ANZ LVR reduction could further damage an already fragile home buying market.

Mark Hewitt, AFG general manager of sales and operations, said his initial reaction was one of concern.

“Those loans of greater than 90 per cent LVR are typically first home buyers, so such changes could virtually evaporate the government’s first home buyer incentives immediately,” he said.

Mr Hewitt said without a recovery in the first home buyer market there were potentially negative ramifications for other market segments.

However while there is a tendency for the major banks to follow one another’s lead, Auspak Financial’s Mark Mellick said ANZ’s changes weren’t necessarily a sign that industry-wide changes were on the cards.

“At the end of the day we’re going to see all the banks making changes as the economic conditions change, but they won’t necessarily be the same as ANZ,” he said.

“All the banks have different business models and each will look individually at where they might want to tighten up,” he said.

Published: 20-11-08 

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