Big banks cutting lending standards

Banks and lenders are cutting lending standards as demand for mortgages slides and competition boils over.

Lenders are increasingly enabling home buyers to make smaller deposits, new research indicates.

About three in every five mortgage products now enable home buyers to borrow at least 95 per cent of the value of their property and major lenders are among those “loosening the belt.”

An ANZ spokesman said a loan-to-value cap of 90 per cent remained in place for all new borrowers, but existing customers with strong credit histories were able to re-finance at higher ratios.

Nomura banking analyst Victor German said lending standards broadly appeared to be weakening, but it remained the exception to the rule for home buyers to borrow as much as 95 per cent of the value of their properties.

Source: Herald Sun