Lenders change income requirements

Several banks have changed their repayment calculations on property investor loan applications to principal and interest, from interest only. Some loan applicants have found they now need double or triple the income they required previously.

On a loan of one million dollars, a bank might assess at 4.5 per cent, that’s $45,000 a year of income required to service the loan. Now, they are assessing that same loan as principal and interest at about $86,000 a year.

Source: The Adviser