To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
CBA this week announced it has changed the eligibility requirements for home loan applications involving foreign income and temporary residents.
These changes include removing self-employed foreign currency income as an eligible source of income and removing specified temporary Australian residents working in Australia and being paid in foreign currency income as eligible borrowers.
The bank is also reducing the maximum LVR from 80 per cent to 70 per cent for specified temporary Australian residents living and working in Australia and being paid in AUD.
A CBA spokesperson told Mortgage Business that the bank has tightened requirements for some temporary residents, in the areas of self-employed applicants and temporary visas, who are seeking to borrow for residential purposes.
“Applications involving these customers represent a significantly low proportion of our total home loan applications and these are verified and assessed in line with Commonwealth Bank’s lending policies including requirements for income earned in Australia,” the spokesperson said.
“We constantly review and monitor our home loan portfolio to ensure we are maintaining our prudent lending standards and meeting our customers’ financial needs.”
CBA’s decision comes after ANZ announced a raft of changes to its home lending criteria including serviceability assessments and foreign income thresholds.
In a note sent to mortgage brokers last month, ANZ said it was evolving its credit policy to enhance decision-making.
An ANZ spokesperson told Mortgage Business that the bank regularly reviewed its retail credit policies to ensure lending remained prudent and aligned with risk appetite in light of the competitive, economic and regulatory environment.
“For our customers, these changes are designed to ensure that we continue to assess any application for credit in a prudent way in view of their individual circumstances,” the spokesperson said.
[Related: ANZ announces lending changes]