Major Lenders increase loan to value ratio

The Commonwealth Bank has become the latest in a long line of lenders to increase its maximum LVR.

Over the weekend, the major announced it would allow all new mortgage customers to borrow up to 95 per cent of the value of a property.

Previously, new customers were limited to 90 per cent LVR, while existing customers could borrow up to 95 per cent.

In the past month, CBA, St George and  ING Direct increased their maximum loan to value ratio to 95 per cent, suggesting high LVR lending is back en vogue.

The major lenders are all increasing their maximum loan to value ratio. I believe this is a direct response to growing competition for a smaller number of borrowers.

Even though the mortgage insurance premiums above 90% LVR are very expensive this is a very good thing for borrowers with smaller deposits.



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