Adelaide Bank ups LVR

The new loan to valuation ratio will be available to owner occupiers, via the third party channel and the bank’s mortgage managers, effective Monday 23 August.

Damian Percy, general manager of third party mortgages at the bank, said the move was a response to ongoing demand from the intermediary market and borrowers for alternatives to the major banks.

“We observed that a lot of banks had restricted their high LVR lending and a lot of customers were being sent away,” Mr Percy told The Adviser.

“Options for first time buyers were particularly limited.”

Adelaide Bank offered 95 per cent LVRs to customers prior to the credit crunch but had since restricted its LVRs to 90 per cent.

Mr Percy said the bank was now well positioned in terms of funding.

“The group has spent the last 18 months or so getting our balance sheet right. We arguably have the highest level of deposit based funding of any Australian bank at the moment; we also recently completed a RMBS deal,” he said.

While the bank looked forward to being able to offer borrowers greater borrowing options Mr Percy said caution would still be taken when exposing them to such high LVRs.

“We don’t want any of our customers to be too highly geared so they still require genuine savings and they must be more than comfortably able to service the loan,” Mr Percy said.