Commonwealth Bank has announced further restrictions to credit policies for both owner-occupier and investor loan customers.
In a note sent to mortgage brokers on Friday, the major bank said it will apply a “servicing loading” of 20% to all repayments on existing home loans and lines of credit held by customers, the Australian Financial Review
. This means that repayments which were assessed at $1,000 a month will now be assessed at $1,200 a month.
also said it would take a tougher stance when assessing a borrower’s income. It will only accept 80% of income from overtime, bonuses, and investment income when it is assessing owner-occupier and investment loan applications.
In addition, the major bank will not consider tax breaks investors receive from negative gearing when deciding to approve a loan application, on investor loan applications above 90% LVR.
The maximum LVR for owner-occupier loans has also been reduced to 95%.
“As the nation's largest home loan provider we constantly review and monitor our loan portfolio to ensure we are maintaining prudent lending standards and meeting our customers' financial needs,” the note to brokers said, according to the AFR
Last month, Australian Broker reported that Commonwealth Bank removed its $1,000 Investment Home Loan Rebate Offer and reduced pricing discounts offered on investor loans in response to APRA’s fears about an over-heated property market and risky lending standards.