MyState Bank has told brokers that it has paused accepting applications for new customers with a loan-to-value (LVR) ratio of 90 per cent or more.
While the cessation does not apply to existing customers, it does apply for all new applications submitted after 5pm on Friday, 18 September.
Speaking to Mortgage Business, a spokesperson for MyState Bank said the decision to restrict lending to below 90 per cent LVR was made “in direct response to the competitive offers currently available from MyState Bank to ensure that the offers are complemented by competitive service standards”.
The bank particularly noted that it had seen high demand for its $2,000 cashback offer for those refinancing to MyState, as well as for its “competitive pricing for lending with an LVR of less than 60 per cent” and its First Home Loan Deposit Scheme (FHLDS) product.
Indeed, the bank last month announced that it was pausing new applications for the FHLDS to deal with the backlog.
The spokesperson commented: “We have received such strong response to our offers that it has impacted our service standards – to which we hold ourselves to high account.
“In order for us to restore our service levels, we have decided to concentrate on those segments which we can provide the best service.
“For now, our priority remains on ensuring that we’re managing our business to ensure that we’re providing the best possible service to our brokers and customers.”
[Related: Non-major bank ‘pauses’ FHLDS loans]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.