What are LVR's and what's happened to them?
In this mortgage minute we chat about the reserve banks Loan to Value Ratio or LVRS and what’s happened to them.
LVRs were intended to reduce banks' exposure to low equity lending if we got another major downturn in the property market.
They restricted the amount of lending major banks could make to borrowers with a loan to value ratio of over 20% for owner occupiers and 30% for investors.
However due to Covid-19 From the 1st of May 2020 the reserve bank has removed these restrictions for a minimum of one year, to help support the property market.
This doesn’t mean you don’t need to save a deposit to get into a new home as banks still have their own lending criteria to adhere to and in the current economic climate will be conservative around how they assess your lending application.
Sound confusing? It often is, but don’t panic we can talk you through each lender's criteria and give you guidance around how to meet them and what size deposit you will need. So give us buzz on 03 471 8825 and book a free appointment to talk through it.