Good news on LVR rules!
The Reserve Bank has made changes to the loan to value ratio (LVR) restrictions in place.
What are they?
More customers can access loans over 80% for owner occupied property.
Investors can borrow 65% on a residential investment property.
This is great news for first home buyers as more funds will be available for loans with less than 20% deposit.
Construction loans are still exempt from the Reserve Bank restrictions.
Parents with equity can still act as guarantors to help their kids into a home.
Details of the announcement
The Reserve Bank today announced a modest easing of the loan to value ratio (LVR) restrictions currently in place.
From 1 January, the LVR restrictions will require that:
- No more than 15 percent (currently 10 percent) of each bank’s new mortgage lending to owner occupiers can be at LVRs of more than 80 percent.
- No more than 5 percent of each bank’s new mortgage lending to residential property investors can be at LVRs of more than 65 percent (currently 60 percent).
Please contact us with any questions, we are happy to help.