CBA is putting the squeeze on investor lending again

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The Commonwealth Bank has further toughened lending to property investors, now insisting they have at least a 10% cash deposit.

The bank cut the maximum loan-to-value ratio for investment home loans to 90% from 95%, effective immediately.

“Commonwealth Bank constantly reviews and monitors its home loans portfolio to ensure we are meeting our responsible lending and regulatory obligations, and the needs of our customers,” the bank said in a statement.

“There has been no change for owner occupier home loans.”

The Commonwealth last month increased rates for interest only housing investor loans and line of credit home loans. This was widely seen as a move to stay within the 10% a year cap for investor credit growth.

Bankwest, owned by the Commonwealth, today increased interest rates on new investment home loans by 15 basis points. All new, two to five year fixed terms for investment loans also go up by the same amount.

The subsidiary also increased by 12 basis points the rate of new owner occupied home loans with a loan to value ration of more than 90%.

Investor activity in Australia’s housing market has accelerated in recent months, according to data from both the Reserve Bank of Australia and the Australian Bureau of Statistics.

And the Reserve Bank has been signalling further tightening of investor housing loans.

Michele Bullock, the Reserve’s assistant governor of financial systems, said that initial macroprudential measures introduced by banking regulator APRA could be tightened further in light of recent investor-led heat in the nation’s eastern capitals.

Dan Huggins, executive general manager home buying, says he expects the latest change to affect a very small percentage of loan applications.

“We are constantly reviewing our home loan portfolio,” he says.

“Today’s change will enable us to meet our customers’ needs, while further strengthening our high quality home loan business and ensuring we continue to meet our responsible lending and regulatory obligations.”

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