Received this email on Friday.
In this issue:
- Changes to Loan to Value Ratio (LVR)
In response to the softening in the economic environment ANZ has been tightening lending standards in recent months, including recently removing Lo Doc lending with an LVR greater than 60%. As a responsible lender, ANZ does not want customers in a situation where they are over extended.
Effective Monday, 17th November 2008 ANZís maximum Loan to Value Ratio (LVR) will change from 95% to 90%.
Although ANZís mortgage portfolio credit quality remains sound and customers are managing repayments well overall, we expect some weakening in the economy in 2009 which many economists are predicting will result in an up-tick in unemployment and the potential for some softness in property prices in selected areas.
ANZ believes reducing the maximum LVR from 95% to 90% is a prudent and measured response to the emerging economic environment and is both in the bank's interest and our customer's interest.
For standard residential property, ANZ will continue to require Lenders Mortgage Insurance (LMI) to be payable when the LVR is greater than 80% to the new maximum of 90%. Please note LMI can be capitalised up to the new LVR maximum of 90%.
I imagine there may be others following suit.