AMP Bank has classified foreign borrowers as “unacceptable”, while also cracking down on overseas income sources and currencies used for lending purposes.
According to a statement of credit policy changes provided to The Adviser by AMP, non-resident borrowers are now classified as an “unacceptable borrower type, unless a spouse/de facto is a citizen or permanent resident of Australia or New Zealand and a borrower of the loan”.
The bank has also implemented a two-tiered system for foreign currencies as part of new LVR restrictions.
Where foreign income is used for serviceability from a tier 1 currency – the Canadian dollar, the British pound, the Hong Kong dollar, the Japanese yen, the New Zealand dollar, the Singapore dollar and the US dollar – the maximum LVR is now 70 per cent.
Where the Chinese yuan (a tier 2 currency) is used for serviceability, the LVR is now 50 per cent.
Furthermore, AMP is now only accepting 80 per cent of income derived from tier 1 currencies and 50 per cent of income derived from the Chinese yuan for lending purposes, while foreign self-employed income is “not acceptable”.
“Our standards are continually reviewed with market developments to ensure we remain a prudent and responsible lender,” an AMP spokesperson told The Adviser.
“Our criteria for overseas borrowers has recently been reviewed in line with this objective.”
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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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