Westpac Banking Corporation has tightened its mortgage loan criteria by lowering its loan-to-valuation ratios (LVR) for new full-documentation mortgage customers on Wednesday from 92 per cent to 87 per cent including two per cent for lenders’ mortgage insurance.
The LVR for new low-documentation customers has been lowered by Westpac to 80 per cent including LMI.
The action is part of a wider industry move by banks to realign their funding towards intermediaries on a quality basis.
What does that say about their business model and more importantly about their projected mortgage defaults moving forward? It might signal a tightening of credit over the next 12 months.
So, what does this mean for investment property buyers? I think it means you might get a bargin in 12 months.