What you should know

Monthly Chronicle - - Business & Personal Finance -

Over the past 12 to 24 months, mort­gage lend­ing has tight­ened up sig­nif­i­cantly. This is due to the reg­u­la­tors get­ting ner­vous of the heated Syd­ney and Mel­bourne prop­erty mar­kets. Banks have in­creas­ing pres­sures on them to stay in cer­tain thresh­olds, such as a max­i­mum of 30% of their loans be­ing in­ter­est only and no more than 10% year on year growth for in­vest­ment loans. The changes have made an im­pact to lend­ing and are here to stay. Some of the ma­jor changes are as fol­lows:

Bor­row­ing ca­pac­ity: The amount of mort­gage avail­able to you is de­pen­dent on nu­mer­ous fac­tors, i.e. your in­come, ex­penses, num­ber of chil­dren, your age etc. Each in­di­vid­ual lender cal­cu­lates this in a sim­i­lar way, how­ever some lenders can be more gen­er­ous than oth­ers. Some lenders scru­ti­nise cer­tain in­comes, such as over­time and bonuses and won’t take some in­comes into con­sid­er­a­tion. i.e. Cen­tre­link in­come, though other lenders will.

Most re­cently, banks have tight­ened up how much of a loan they will give you. This is mainly due to lenders in­creas­ing their ‘as­sess­ment rate’ and ‘liv­ing ex­penses’.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.