Two lenders have announced changes to their credit policies to ensure compliance with responsible lending measures, effective immediately.
National Australia Bank (NAB) and Homeloans Ltd (in which NAB is a major shareholder) have implemented credit policy changes that will tighten lending provisions.
The two lenders have introduced a “minimum monthly board/rental/living at home” expense.
The $500 monthly expense will be applied to borrowers who do not live in their home following settlement.
Brokers will therefore need to answer a new question in the minimum board policy which will be included in the serviceability calculator.
According to Homeloans, the changes aim to ensure that it “continue[s] to lend responsibly” and “make it clearer and simpler for [brokers] to deliver a great customer experience”.
Homeloans has also increased its maximum LVR from 90 per cent to 95 per cent for owner-occupier, principal and interest vacant land loans and reduced its minimum loan facility amount from $30,000 to $20,000.
Homeloans’s current policy will be applied to all new loans (including increases) submitted prior to 11:59pm on Sunday, 28 January, while its new policy will be applied to all applications lodged after this date.
It noted that its Ultra Plus Serviceability Calculator will be updated to reflect the credit policy changes.