Join Australia's most dynamic and respected property investment community

ANZ LMI cost @ 88%?

Discussion in 'Property Finance' started by mja, 6th Oct, 2015.

  1. mja

    mja Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    175
    Location:
    Sydney
    Hi all,

    So apparently ANZ will only lend up to 88% for investment properties; does anyone know what the % cost LMI is at 88% for ANZ LMI?
     
  2. Coota9

    Coota9 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    970
    Location:
    Melbourne
    mja likes this.
  3. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    LMI isn't a fixed amount at LVR's.

    It's a calculation which factors a few things, not limited to:

    • LVR
    • Loan Amount
    • State
    • Employment Type
    • Purchase type
    • borrower type
     
    D.T. and mja like this.
  4. tobe

    tobe Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    879
    Location:
    Melbourne
    I'm pretty sure they do up to 92% including LMI for new to bank customers and 97% if you have been a credit customer of theirs for more than 6 months. This is for both oo and inv.
     
  5. mja

    mja Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    175
    Location:
    Sydney
    Are you sure?

    They dropped it to 90% back in August for INV and apparently it's now only 88%. I managed to get a 95%+LMI in before the change.
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,094
    Location:
    Melbourne, Nationwide
    That's been my most recent experience as well. ANZ won't exceed 90% inclusive of LMI. I haven't confirmed via any policy, just the last deal we put there was restricted to this.
     
  7. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    853
    Location:
    Sydney (West) and Canberra
    ANZ had two policy changes,
    1. Reduction to 90+cap LMI for investment loans.

    About three-five weeks later they reduced it to a max LVR of 90%. This ends up being around 88%+cap LMI.

    I don't believe there's been another change down to 88% inclusive of LMI.

    Most recent changes (Oct 1) had improvements to valuation policy and minor adjustments to living costs (inflation adjustment).
     
  8. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    Correct, the maximum LVR for ANZ is now 90% inclusive of any capitalisation for investors.

    97% still remains for owner occupiers.
     
  9. Watson1

    Watson1 Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    110
    Location:
    Melbourne
    the 88% is just a rough estimate of the maximum lend prior to capping of LMI.

    generally when you purchase at 88% plus cap it comes up quite close to 90% inclusive.

    Policy is max 90% inclusive of LMI.
     
  10. JohnPropChat

    JohnPropChat Well-Known Member

    Joined:
    10th Sep, 2015
    Posts:
    567
    Location:
    Perth
    What other lenders offer 95% to 97% for OOs?
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,094
    Location:
    Melbourne, Nationwide
    Quite a few. All of the majors will go to 95% or 97%, most of the second tier lenders will also do it.

    Realistically you can expect to pay higher rates in most cases, and the LMI premiums are very high. In many situations the numbers play out such that it's not a big savings stretch to qualify for a 90% loan instead of a 95% lend.
     
    JohnPropChat likes this.
  12. JohnPropChat

    JohnPropChat Well-Known Member

    Joined:
    10th Sep, 2015
    Posts:
    567
    Location:
    Perth
    I suppose all the 90+% deals are also P&I only?
     
  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,094
    Location:
    Melbourne, Nationwide
    I'm fairly certain that the CBA and Westpac/StG group can do I/O above 90%. It would need to be confirmed though, as we don't do a lot of loans at these LVRs.

    Seriously if at all possible, find a way to do it at 90%. Rates go up, risk tolerance assessment gets nasty. The cost of LMI means that you're probably borrowing 93% + LMI for a 97% lend. It's often only a difference of finding another 3% for the deposit to qualify for a 90% lend, and everything about the finance becomes significantly easier and cheaper.
     
    JohnPropChat likes this.
  14. tobe

    tobe Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    879
    Location:
    Melbourne
    ANZ better change their LMI calculator then. I calculated an investment loan this morning at lvrs above 90.
     
  15. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    Still IO options above 90% and without rate penalty - however generally for owner occupiers a P&I rate will have stronger standard rates + negotiated rates.

    Peter has touched on an important point however that the efficiency of your deposit is eroded dramatically once you hit over 90%, so saving that tiny comparative amount more will enable you to have a stronger borrowing position for future cashouts etc.
     
    JohnPropChat likes this.
  16. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    853
    Location:
    Sydney (West) and Canberra
    From an investment perspective, it doesn't make much sense to go above 90% as the cost of extra funds is extremely high (LMI + potential rate loading).

    From a home owner perspective, its quite common and necessary for first timers to rely on this type of lending to get through. Especially in Sydney where 500k doesn't get you very far at all. There's also slightly cheaper LMI premiums, grants, etc that assist with the deposit side of the equation.

    Cheers,
    Redom
     
    JohnPropChat likes this.
  17. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,141
    Location:
    Canberra and Sydney
    90% inclusive of lmi for ANZ. Basically need to have a 12% deposit these days for IPs.....there's a few exceptions but credit scoring becomes harsher and lmi costs sky rocket.
     
    MJS1034 likes this.
  18. S0805

    S0805 Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    333
    Location:
    VIC
    That is interesting. So ANZ still does the 90% lend (inclusive of LMI) for Investment loans. Advised I received is that its dropped to 80% for investment. Do ANZ have specific LVR requirements on where you buy....I am looking in SYD.... How accurate their 'Borrowing Calculators' are on website...to test the serviceability....thanks
     
  19. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    No LVR requirements for the mainstream purchases which will cause issues.

    Borrowing calculators across all the lenders are useless - they're inaccurate marketing tools. Get an investment based broker to run through your numbers and look at your finance situation in a holistic manner - there may be more options than previously expected, or other challenges/opportunities to consider.
     
  20. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,141
    Location:
    Canberra and Sydney
    Yep - still doing relatively hassle free equity releases at 90% too.

    Cheers

    Jamie