Non-major changes lending policy

Teachers Mutual Bank said it is increasing its maximum loan to value ratio (LVR) from 70% currently to 80% for residential investment loans.

The regional bank is also changing its serviceability requirement.

In a note to brokers on Wednesday, the bank said that its minimum living expenses figures are changing based on the release of Q4 2017 Household Expenditure Measure data.

It is revising its serviceability calculator for brokers’ use.

The bank also said that it will not lend “when the purpose is for cryptocurrency”.

The changes are effective Monday, 12 March, and apply across all its brands, including UniBank and Firefighters Mutual Bank.

The lender is one of the first non-major banks to announce a change to its serviceability assessment as APRA continues its crackdown on higher risk lending.

Major banks ANZ and Westpac introduced changes to their assessment and approval of borrowers last month, while NAB changed its loan to income ratio for home lending credit assessment amid concerns over the rising household debt to income ratio.

Stricter assessment of borrowers' ability to repay their loans will likely become the norm among lenders now that APRA is focusing on serviceability in its proposal that targets higher-risk residential mortgage lending.