A major bank has revealed that it is changing its maximum LVR for interest-only loans, effective 10 June.
NAB has announced it will require a new maximum LVR on interest-only loans of 80 per cent, and a new maximum LVR on construction loans of 90 per cent.
A NAB spokesperson said the changes will be effective as of Saturday, 10 June 2017.
Referring to APRA’s issuance of new guidance in March requiring a cap on interest-only home loans to 30 per cent of banks’ new mortgage lending, the spokesperson said: “These changes are being made to ensure we meet our regulatory requirements, and continue to lend prudently.”
“NAB is making changes to some of its policies regarding interest-only home loans to ensure we continue to meet our regulatory requirements and responsible lending obligations,” the spokesperson concluded.
The changes come after the other big four banks announced adjustments to their interest-only lending.
Just over a week ago, CBA reduced its discounts for new owner-occupied and investment home loans with interest-only payments. Additionally, from Saturday, 10 June, the bank said it will reduce the maximum LVR from 95 per cent to 80 per cent for new owner-occupied, and from 90 per cent to 80 per cent for new investment home loan applications with interest-only payments.
Earlier in the month, ANZ announced that from Monday, 29 May, interest-only availability for both owner-occupier and investment lending will be restricted to maximum 80 per cent LVR for new and increased lending.
Similarly, in a recent update to its brokers, Westpac announced that effective Monday, 15 May, the maximum LVR (inclusive of any capped mortgage insurance premium) for owner-occupied interest-only is 90 per cent. This applies to both new loans and further loans (loan increases and top ups).