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Higher LVRs 'not the answer': QBE LMI

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Australian Broker | 12 Oct 2011, 06:30 AM Agree 0
Raising LVRs is not the answer to addressing affordability, and more innovative products are needed for the mortgage market, QBE LMI chief Ian Graham has stated
  • Chris C | 12 Oct 2011, 10:48 AM Agree 0
    Agree to a point with new borrowers however increased LVRs can be good in some cases with refinances where the higher LVR is only 'replacing' the lower valuations we are seeing with borrowers who can clearly meet debt service anyway but who are also looking for better rates and terms now that some competition albeit smoke and mirrors at present) are creeping back into the market.
  • Matt | 12 Oct 2011, 10:55 AM Agree 0
    I still can't believe a lender hasn't come out with a loan that has up to a 40 year loan term for borrowers of a certain age. If you're 30 years of age you should be able to take out a 40 year loan and step it down to 30 years to age 40. This will improve affordability for younger borrowers.
  • mark | 13 Oct 2011, 11:21 AM Agree 0
    Matt, increasing the loan term from 30 years to 40 years makes very little difference to the loan repayment (about $118 per month on a loan of $300,000). On the other hand it greatly increases the total interest paid by the borrower over the term (by more than $200k.
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