Mutual lender tightens investment lending policies

by Julia Corderoy18 Aug 2015
A large mutual lender has announced a “three-pronged” approach to curbing growth in its investment lending portfolio. 

In response to APRA’s request to cool year-on-year investment lending growth to below 10%, Teachers Mutual Bank and its new division Unibank have decreased the maximum LVR for investors to 85%, removed access to the top interest tier for investors on its Solutions Plus Home Loans, and increased the investment home loan servicing requirement, now requiring applicants demonstrate a surplus of $500 above their ability to service the loan.

“These product and policy changes aim to slow down our investment home loan growth and demonstrate our commitment to meeting APRA’s requirements,” Steve James, CEO of Teachers Mutual Bank said.

According to APRA’s latest banking statistics, in the 12 months to June 2015, Teachers Mutual Bank grew its investment loan portfolio by 27%. 

According to the mutual, members who have applied for an investment home loan and have not yet funded will proceed with the current approved structure. However, if a loan has exceeded its 90-day approval and requires reassessment, the new conditions and structure will be applied.

All existing investment loans will remain in place and unaffected by the changes.


  • by Lesson Taught 18/08/2015 10:57:37 AM

    A funder that complies with regulatory requirements without gouging their existing and new clients with increased interest rates - simply amazing!
    And whilst still offering fixed rate with 100% offset ...very interesting (pun intended!) We will continue to offer Teachers as a valid option for our owner occupiers and investor clients.
    Teaching the big banks a lesson