First home buyers face tough new loan rules
The boost given to first home buyers by the federal government's big increase in the first home buyer's grants is expected to be largely negated by increased premiums and tighter restrictions on home loans with high loan to valuation ratios. Most first home buyers pay 3-4 per cent of the purchase price of their home. Australia's dominant mortgage insurer, Genworth, says it is “prudent to move back to 95 per cent in the current credit climate.” The second biggest insurer, QBE LMI, has also withdrawn cover for loans with LVRs of more than 95 per cent and raised premiums by up to 15 per cent on loans with high LVRs.
Source: The Australian Financial Review