AMP Bank has classified foreign borrowers as “unacceptable”, while also cracking down on overseas income sources and currencies used for lending purposes.
According to a statement of credit policy changes provided to Mortgage Business by AMP, non-resident borrowers are now classified as an “unacceptable borrower type, unless a spouse/de facto is a citizen or permanent resident of Australia or New Zealand and a borrower of the loan”.
The bank has also implemented a two-tiered system for foreign currencies as part of new LVR restrictions.
Where foreign income is used for serviceability from a tier 1 currency – the Canadian dollar, the British pound, the Hong Kong dollar, the Japanese yen, the New Zealand dollar, the Singapore dollar and the US dollar – the maximum LVR is now 70 per cent.
Where the Chinese yuan (a tier 2 currency) is used for serviceability, the LVR is now 50 per cent.
Furthermore, AMP is now only accepting 80 per cent of income derived from tier 1 currencies and 50 per cent of income derived from the Chinese yuan for lending purposes, while foreign self-employed income is “not acceptable”.
“Our standards are continually reviewed with market developments to ensure we remain a prudent and responsible lender,” an AMP spokesperson told Mortgage Business.
“Our criteria for overseas borrowers has recently been reviewed in line with this objective.”