Bank of Melbourne admits error on tougher lending conditions for overseas borrowers

Font size :
Westpac Group-owned Bank of Melbourne admitted that increasing the deposit overseas borrowers need to be eligible for a loan by up to 22 per cent was “an error in our broker communications.”

“The loan to value ratio for temporary visa residents remains 90 per cent, not 70 per cent as previously stated,” said a bank spokesperson. “We have strengthened our policies regarding non-residents lending and foreign income, which represents a very small component of our loan book.”

Many mortgage brokers believe that this “tweaking and re-tweaking” of policies was part of the bank’s strategy to rapidly build market share in a sector that other lenders are increasingly nervous about. After all, the Bank of Melbourne waited two weeks to amend the error, describing it in confidential communications to brokers as a “revised policy update.” Hence, it created speculation that it had backflipped the earlier policy change.

House sales have remained strong in both Sydney and Melbourne as the official interest rate hits a record low of 1.75 per cent. However, buyers are nervous about potential changes to negative gearing, apartment glut, and housing affordability.

On the other hand, lenders are more cautious with overseas buyer applications especially the ones from China, as there is growing evidence that these borrowers are using incomplete or fraudulent loan documents to possibly launder money. Various banks have tightened their lending policies in recent weeks as a response to these revelations, with Australia’s big four banks leading the way.

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

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Friday, Sep 22, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords