Following on from its major bank peers, another Australian lender has today announced new changes to limit investor home loan growth.
Teachers Mutual Bank has announced a “three-pronged approach” to limiting investment home loan growth in response to APRA’s request to ADIs to curb lending in this space.
Teachers Mutual Bank and its new division Unibank, have tightened LVR requirements for investors to 85 per cent prior to capitalising the applicable lenders mortgage insurance (LMI) premium.
In addition, the bank is removing access to the top interest tier for investors on its 'solutions plus' home loans and increasing servicing requirements, with investment home loan applicants required to demonstrate a surplus of $500 above their ability to service the loan.
“These product and policy changes aim to slow down our investment home loan growth and demonstrate our commitment to meeting APRA’s requirements,” Teachers Mutual Bank CEO Steve James said.
"Although Teachers Mutual Bank’s percentage growth in the first quarter will be boosted as a result of its recent merger with Unicredit, it will focus on organic growth in the immediate future,” he said.
In a statement today the lender said that for the present, members who have applied for an investment home loan and have not yet funded will proceed with the current approved structure. If a loan has exceeded its 90-day approval and requires reassessment, the new conditions and structure detailed in this communication will be applied.
All previously funded loans will remain in place and unaffected by the changes.
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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