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CUA’s head of product, Mark Petty, said the credit union has increased the maximum LVR from 70 per cent to 85 per cent “across most variable and fixed-rate home loans” for new investor borrowers.
“Existing CUA customers and new customers bringing their owner-occupied and investor home loans to CUA will be subject to a higher maximum LVR of 95 per cent,” he said.
“A maximum LVR of 80 per cent will continue to apply for new and existing customers taking out CUA’s Fresh Start Basic investor loan and Fresh Start Variable investor loans.”
Mr Petty said the credit union is committed to maintaining its annual level of investor lending growth at approximately 10 per cent, and is closely monitoring its lending activity and reviewing lending policies as required.
“CUA has been actively working to slow our investor home loan balance growth,” he said.
“The measures we introduced in 2015 have succeeded in managing our year-on-year investor balance growth below 10 per cent per annum as required by regulator APRA.”
CUA’s changes comes after Teachers Mutual Bank announced that it is temporarily withdrawing from new investment lending in an attempt to curb its success in the sector and be in line with APRA’s 10 per cent cap.
“The strong demand from our membership base has meant our investment home loan growth has not slowed in line with our expectations, despite the bank applying a number of micro-policy and pricing disincentives during 2016,” Teachers Mutual CEO Steve James said.
“In any other context, the strong demand for our investment loan products would be very pleasing, but we take our responsibilities to the regulator extremely seriously, so we have proactively made the decision to temporarily withdraw from investment home lending to new business, effective Wednesday 25 May 2016.”
[Related: Banks announce raft of lending changes]