Media Reports CBA to drop 95% LVR to 90%

Media reports a CBA spokesperson says LVR max of 95% is gone. To be 90% max.

 

Yep - most had already done this earlier, CBA simply made servicing harder for 90%+ but have now dropped to 90.

In most circumstances doesn't make too much sense to go above 90 for INV deals given the higher LMI % premiums. But it does mean less options available for these scenarios.

 

Yep.
Speedbump hitting... so why not.

CBA changes LVR for home loan investors

CBA changes LVR for home loan investors

"Commonwealth Bank constantly reviews and monitors its home loans portfolio to ensure we are meeting our responsible lending and regulatory obligations, and the needs of our customers.

Today we are reducing the maximum Loan-to-Value ratio for investment home loans to 90 per cent, meaning investors should ensure they have a 10 per cent deposit. This change relates only to investment home loans and is effective immediately (13 March, 2017).

There has been no change for owner occupier home loans.

Every home loan application is assessed on a case-by-case basis, and we expect this change will affect a very small percentage of the home loan applications we receive.

Dan Huggins, Executive General Manager Home Buying, Commonwealth Bank, said: “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.”

 

It's a done deal - received the email today.

All good - just another change to work with.

Cheers

Jamie

 

Here's a extract from this morning's email:


Changes to Maximum LVR Amounts

Effective immediately we are reducing the maximum LVR for these application types:

►Investment Home Loans from 95% to 90%
►Viridian Lines of Credit (personal and investment purposes) from 92% to 90%
►Home/Investment Home Loans refinancing an OFI Home Loan from 92% to 90%
►Home/Investment Home Loans with a Bridging Loans Feature from 92% to 90%
►Home/Investment Home Loans with a Low Documentation Feature from 82% to 80%


Not particularly surprising. The CBA was overly aggressive last year in persuing investment lending and one of the few offering 95%. This is simply pulling in the extremes a little, I wouldn't have been surprised if they'd done more.

 

Is anyone still offering 95 percent LVR loans?

 

Good. I'm surprised APRA hasn't insisted on this industry wide.

 

Does this mean CBA are back doing investment lending or are they still sitting out?

 

The CBA has never withdrawn from investment lending, but they have recently had some restrictions. This is just another one.

 

In recent updated prudential guidelines they did specifically mention that risk of loss is higher 'above 90% LVR', and would be prudent for banks to manage against this.

 

So few investment 95%' ers would have be written anyway. The real killer is 90% + LMI now no longer available for Inv.

 

Can't remember the last time I have done a 95% IHL. Only time I've gone above recently is on a HL equity release when I reasonable amount of LMI has been paid previously so there are credits.

90% cap does hurt a little though as I do a fair bit 90%+LMI

 

Yep :-( That was my go to for CBA deals...the good ol' 90% + LMI IP lend....they were the last decent lender to succumb to the 88% + LMI loan

Cheers

Jamie

 

It's exceedingly rare that we write many 95% LVR purchases, I generally advise the client against it as the overall increased deposit requirement vs LMI costs makes a 90% LVR as far more effective. The removal of 90%+LMI is certainly something which constrains the market options a little further.