The National Australia Bank is the last of the Big Four banks to close its doors to foreign property buyers who have no income source in Australia. The move comes in response to changing conditions in the market and stricter regulatory requirements.
Previously, NAB reviewed applications for foreign loans on a case-to-case basis, but it kept a maximum loan-to-value ratio of 60 per cent. According to a NAB spokesperson, the foreign property loan segment only makes up a small percentage of the bank's lending book and it has limited appetite for the segment.
To qualify for a property loan, NAB requires borrowers to present proof of existing Australian income on top of other pertinent documentation.
NAB's move is the latest development in Australia's foreign lending crackdown amid previous reports of fraudulent documents being presented by foreigners buying properties in the country. Just recently, the Commonwealth Bank has started to turn down applications with self-employed foreign currency income. While Westpac said that it could offer property loans to nationals and residents of Singapore through NAB's branches in the said country, analysts pointed out that the loans would still have to follow Singapore's Total Debt Servicing Ratio framework.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now