Good news this morning from the Reserve Bank as the LVR (Loan to Value Ratio) restrictions are going to be eased from 1st January 2018.
At the moment the banks can only have 10% of their total lending to people with less than 20% deposit. From January 1st they will be able to lend 15% of their total loans to people with lower deposits.
This is great news for First Home Buyers as it means there will be 1.5x the amount of lending available to people with lower deposits. This should make lending at this level much easier.
They have confirmed that there will be a slight easing in the rules for maximum of 60% lending on investment properties as well. The maximum lending on rental properties will now increase to 65%
Each bank will have the ability for 5% of their investment lending to be higher than 65% LVR. That in itself won't make a huge difference but it's a start in making things easier for borrowers!
Read the full release from the Reserve Bank on this link.
As always we'll keep you posted with updates once more information comes to light.
In the meantime feel free to download one of the fact sheets below with helpful information for First Home Buyers.
Adam, Claire and the My Mortgage Team.