Following a “comprehensive” risk assessment of the Commonwealth Bank’s $270 billion home mortgage book, the CBA has decided to restrict lending to potentially risky property investors by reducing the LVR to 80 per cent for investment home loans, effective from March 20th.
The changes will require residential property investors to bring a 20% deposit to the table before the CBA will lend. On a $500,000 loan, the investor will need to contribute a $100,000 deposit.
The changes follows a decision in January by Westpac to tighten credit on housing loans. The CBA has the largest market share of home loans in Australia.
» CBA tightens screws on lending – The Herald Sun, 9th March 2010.