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Reserve Bank to loosen mortgage lending rules
Loan-to-Value (LVR) changes on mortgage lending to be eased.
AI summary
The Reserve Bank is loosening Loan-to-Value Ratio (LVR) restrictions from 1 December, helping buyers secure a mortgage with a smaller deposit.
Key changes for banks' new lending include:
- Owner-occupiers: The allowance for high-LVR (over 80%) lending increases from 20% to 25%.
- Investors: The allowance for high-LVR (over 70%) lending doubles from 5% to 10%.
This adjustment follows the introduction of Debt-to-Income (DTI) rules, which remain unchanged, and aims to improve credit access without significantly impacting house prices.
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