RBA says beware of high LVR loans

Commonwealth Bank, NAB and Westpac reduced deposit requirements to 5 per cent on some home loans this month. RBA head of financial stability Luci Ellis urged banks not to return to risky lending practices engaged in before the global financial crisis.

“If lenders were to ease lending standards beyond the point of prudence, they would not be doing anyone any favours. Their customers, the borrowers, would be overburdened by their debts. The banks themselves would face difficulties if loan defaults were to rise and financial stability would be much harder to maintain.”

Source: The Daily Telegraph