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Kate Miller
A raft of higher LVR products has recently been launched to the market but it is unlikely the industry will revert to pre-GFC times where the market was awash with 100 per cent products.
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Adelaide Bank’s recent launch of its 95 per cent LVR product, among others, has opened up opportunities for mortgage managers and brokers alike.
One lender has gone so far as to launch a 99 per cent LVR product, with Mortgage House introducing its 99 per cent LVR Altitude Home Loan on Friday.
But while brokers have welcomed the return of higher LVR loans, some are sceptical as to how easy it will be to get such products approved.
“With these products coming from the non-major players, it’s particularly good news for competition, and the consumer,” Justin Doobov of Intelligent Finance in Sydney told The Adviser.
Stephen Porges, CEO of Aussie, said that while the return of high LVR loans had to be seen as a good thing he didn’t expect high LVR lending to become mainstream policy.
“The industry is not awash with credit at the moment,” he commented.
Mr Porges said the industry had moved to a more conservative approach of lending.
“We don’t want to get back to the days of easy high LVR lending,” he said.
Mr Doobov said it would be more difficult to have high LVR loans approved than prior to the credit crisis.
“I would presume it will be a lot harder to get a 95 per cent loan across the line than it was two years ago,” he said.
Mr Doobov said lenders would be looking much harder at borrowers’ serviceability, such as the security of their employment.
He added that a 99 per cent LVR home loan was not going to be an easy loan to qualify for.
“On face value a 99 per cent LVR might sound like the Holy Grail but I would presume criteria for that is going to be quite a lot stricter than other 95 per cent LVR products.”
