TMBL increases LVRs for loans with LMIs

by Malavika Santhebennur•05:35 AM, 18 Mar 2020•11 minute read

The mutual banking group has lifted its maximum LVRs from 90 per cent to 95 per cent for existing dwellings for all occupations, among other changes.

Teachers Mutual Bank Ltd – comprising Firefighters Mutual Bank, Health Professionals Bank, Teachers Mutual Bank and UniBank – has announced changes to maximum loan-to-value ratios (LVR) for loans with lender’s mortgage insurance (LMI) and First Home Loan Deposit Scheme (FHLDS) guarantees.

You’re out of free articles for this month

To continue reading the rest of this article, please log in.

Looking for more benefits? Become a Premium Member.

In an update to brokers, the mutual banking group revealed that maximum LVRs increased from 90 per cent to 95 per cent for existing dwellings for all occupations, effective as of 17 March.

Furthermore, amended LVRs will apply for construction applications (owner-occupied and investors).

For owner-occupied (OO) home loans, the maximum LVRs with LMIs and conditions are as follows:

A maximum LVR of 85 per cent applies to OO home loans with LMI prior to the capitalisation of the premium for LMI and any bank fees, if applicable, for Classic Home Loan – Owner Occupier;
A maximum LVR of 90 per cent applies to OO home loans with LMI prior to the capitalisation of the premium for LMI and any bank fees, if applicable, where the purpose is construction of an owner-occupied dwelling; and
A maximum LVR of 95 per cent applies to OO home loans with LMI including the capitalisation of the premium for LMI and any bank fees, if applicable, for all home loan products except Classic Home Loan – Owner Occupier, and for all acceptable purposes except for construction of an owner-occupied dwelling.

For maximum LVRs when using the FHLDS for owner-occupied home loans, the maximum LVRs with LMIs and conditions are as follows:

A maximum LVR of 85 per cent applies prior to capitalisation of any bank fees, if applicable, for Classic Home Loan – Owner Occupier; and
For a maximum LVR of 95 per cent applies, including the capitalisation of any bank fees, if applicable, for all home loan products except Classic Home Loan – Owner Occupier.

For maximum LVRs with LMI for investment home loans, the maximum LVRs with LMIs are as follows:

A maximum LVR of 85 per cent applies for those with LMI prior to the capitalisation of the premium for LMI and any bank fees, if applicable for Classic Home Loan – Investor;
A maximum LVR of 90 per cent applies for those with LMI prior to the capitalisation of the premium for LMI and any bank fees, if applicable, where the purpose is construction of an investment dwelling; and
A maximum LVR of 95 per cent applies for those with LMI including the capitalisation of the premium for LMI and any bank fees, if applicable, for all home loan products except Classic Home Loan – Investor, and for all acceptable purposes except where the purpose is construction of an investment dwelling.

TMBL’s head of third-party distribution, Mark Middleton, said the changes came after the bank reviewed its maximum LVRs for loans with LMIs and FHLDS guarantees, and considered factors such as the market environment.

He added that the changes aimed to promote new business and competition in the bank’s offering.

[Related: TMB announces fixed rate changes]