Major tightens investor lending

by Miklos Bolza15 Mar 2017
The Commonwealth Bank of Australia (CBA) has announced a reduction in its maximum loan-to-value ratio (LVR) for investment loans from 95% to 90%.

The change became effective as of Monday (13 March) and is a result of the bank’s review and monitoring of its home loan portfolio to meet guidelines set out by Australian Prudential Regulation Authority (APRA).

“We are constantly reviewing our home loan portfolio. Today’s change will enable us to meet our customers’ needs, while further strengthening our high quality home loan business and ensuring we continue to meet our responsible lending and regulatory obligations,” said Dan Huggins, executive general manager of home buying at CBA.

With each mortgage assessed on a case-by-case basis, the bank said that the reduced LVR would only affect a small percentage of the loan applications it receives.

Application conditions for CBA’s owner-occupier loans remain the same.

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