Powered by MOMENTUM MEDIA
the adviser logo
Lender

Major bank announces construction lending changes

by Francesca Krakue4 minute read
House on money

One of the big four banks has revealed that it is changing its maximum LVR for construction loans, effective Saturday, 10 June.

NAB announced earlier this week that it will now require a new maximum LVR on construction loans of 90 per cent.

A NAB spokesperson said the changes will be effective as of Saturday, 10 June 2017.

Referring to APRA’s issuance of new guidance in March requiring a cap on interest-only home loans to 30 per cent of banks’ new mortgage lending, the spokesperson said: “These changes are being made to ensure we meet our regulatory requirements, and continue to lend prudently.”

Advertisement
Advertisement

“NAB is making changes to some of its policies regarding interest-only home loans to ensure we continue to meet our regulatory requirements and responsible lending obligations,” the spokesperson concluded.

The changes come after the other big four banks announced adjustments to their interest-only lending.

Just over a week ago, CBA reduced its discounts for new owner-occupied and investment home loans with interest-only payments. Additionally, from Saturday, 10 June, the bank said it will reduce the maximum LVR from 95 per cent to 80 per cent for new owner-occupied, and from 90 per cent to 80 per cent for new investment home loan applications with interest-only payments.

Earlier in the month, ANZ announced that from Monday, 29 May, interest-only availability for both owner-occupier and investment lending will be restricted to maximum 80 per cent LVR for new and increased lending.

Similarly, in a recent update to its brokers, Westpac announced that effective Monday, 15 May, the maximum LVR (inclusive of any capped mortgage insurance premium) for owner-occupied interest-only is 90 per cent. This applies to both new loans and further loans (loan increases and top ups).

[Related: Bank raises commercial loan rates]

houses on money

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

CEO Sleepout Pepper Money

Mortgage industry raises more than $160k in CEO Sleepout

On 23 June 2022, several CEOs and directors in the mortgage and finance industry spent a night without shelter to...

READ MORE
alex whitlock

New membership program revealed for The Adviser

Members will be able to access exclusive sales and marketing strategy, business intelligence and exclusive market...

READ MORE
Hot property TA

Hot Property: The biggest property headlines from the week 27 June to...

Welcome to The Adviser’s weekly round-up of the headline stories and news that are important not only for the...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more