CBA cracks down on offshore mortgage lending

Font size :
The Commonwealth Bank of Australia is the latest lender to join in the foreign mortgage crackdown as it announced Monday that it would no longer accept loan applications using self-employed foreign income. Borrowers with a temporary Australian residency and are receiving foreign income will also not be allowed to procure home loans.

"Applications involving these customers represent a significantly low proportion of our total home loan applications and these are verified and assessed in line with Commonwealth Bank's lending policies including requirements for income earned in Australia," said a bank spokesman.

CBA also reduced its maximum loan-to-value ratio for temporary residents from 80 per cent to 70 per cent, which is the same as rival ANZ's LVR.

According to John Flavell, the chief broker of Mortgage Choice, CBA's changes reflected trends across the market as lenders are now focusing on income verification to make sure that customers could service loans.

CBA's actions came following the Reserve Bank's statement regarding the fragilities in the property market. It warned that the apartment market could experience some correction, especially in Sydney, Melbourne, and Brisbane. It also expressed concern regarding the possible easing of demand from Chinese buyers, which could lead to bank losses.

"If a significant subset of buyers reduces their demand sharply, this can weigh on housing prices… and so lead to losses on the banks' broader property-related exposures," the RBA said.

Furthermore, according to Finder.com.au, the average home loan size fell 7.71 per cent in the three months to February to $357,200 – its biggest drop since the year 2000.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

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