Bank Increased LVR for Investment from 80% to 90%

Discussion in 'Loans & Mortgage Brokers' started by rhinsor, 9th Nov, 2015.

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  1. Redom

    Redom Mortgage Broker Business Plus Member

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    Its the minimum living expense thats attributed to borrowing power calcs. Lenders have increased the minimum expense levels, and some have tiered the minimum expense levels to your income/location. Theory is if you earn 200k and live in Paddington your likely to spend more on living than someone who earns 50k and lives in Penrith.
     
  2. R377

    R377 Well-Known Member

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    Terry is this definite ? Is what date ? thanks
     
  3. Azazel

    Azazel Well-Known Member

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    Gosh darn the blessed things.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Now I cannot recall where I read that. Perhaps I am imagining things as there is nothing in my email about this.
     
  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Terry probably read it in an industry publication a bit over a week ago.

    AMP haven't officially announced when they're returning to the market, but it's not exactly a secret. They made it known that they'd return to investment loans around Christmas when they announced their with drawl.

    My understanding is that AMP reports their results on the calendar year, not the financial year like most lenders. When APRA told them to reduce their investment book, this meant they had to achieve the required metrics by 31/12/2015, no six months later (like most banks). Their adjustments had to be drastic to meet the time frame and hence they simply stopped lending to investors whilst offering very cheap rates to attract owner occupiers.

    To any broker that asked, they made it known that once they had things sorted out they would be coming back to investment loans. They're now telling brokers that it'll be shortly before Christmas.
     
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  6. Corey Batt

    Corey Batt Well-Known Member

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    Exactly as Peter has said, the BDM's were very open only on that this would be an interrim measure and were looking at reduce their investment exposure as fast as possible so they could in turn re-enter the market.

    Better to pull the bandaid off fast logic.

    In saying that, the relative value of AMP has eroded quite heavily from the successive policy changes, leaving minor benefits which a number of other lenders already cater. (DUA, no credit scoring etc)
     
  7. Elives

    Elives Well-Known Member

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    knowing the minimum is 7-7.5% set by the regulators, since recent interest rate increases. have these buffers also increased? so we'd be looking at 7.3-7.8% now? was it detailed in any of the banks changes / apra that these buffers would increase with interest rate increases?
     
  8. RM1827

    RM1827 Well-Known Member

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    Q hay does OFI stand for?
     
  9. RM1827

    RM1827 Well-Known Member

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    I just read...
     
  10. euro73

    euro73 Well-Known Member Business Member

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    No the buffers havent changed ... if rates moved 50-100bpts they probably would change
     
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  11. euro73

    euro73 Well-Known Member Business Member

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    HIGHER then EXPECTED MORTGAGE costs :)
     
  12. 4point5million

    4point5million Well-Known Member

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    Lmi capped?
     
  13. euro73

    euro73 Well-Known Member Business Member

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    It's becoming the acronym post..

    OFI, HEM, LMI, LVR, DUA
     
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  14. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    90% inclusive of LMI.
     
  15. Waterboy

    Waterboy Well-Known Member

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    Meanwhile our Kiwi cousins are now required 30% deposit on IPs. The RBNZ is a more aggressive regulator than APRA/RBA.

    (Auckland property prices are up 27% Sep'14-'15.)
     
    Last edited: 11th Nov, 2015
  16. turk

    turk Well-Known Member

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    Only in Auckland

    RBNZ sees risk of 'damaging correction' in Auckland housing

    The RBNZ on November 1 tightened lending rules for Auckland residential property investors, requiring them to have a deposit of at least 30 per cent for a mortgage.
     
  17. Jkat

    Jkat Well-Known Member

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    So for someone who doesn't consider themselves economically savvy -- what does this mean?

    When APRA tightened the rules and banks required higher deposits with investors 'leaving the market' it was thought prices would slow down/stabilise/drop back (depending on who/what you were reading).

    Now that they are opening up again does this mean that people think prices will continue to go up? Increase competition again? Or something else?
     
  18. Gabba

    Gabba Member

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    Is an equity release up to 90% now an option with BW or are they still at 80%?

     
  19. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    I haven't heard specifically, but I assume so - max over 80% was $100k and you need full evidence. Their cash out policy is historically pretty junk at the best of times.
     
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