100% Home Loans Officially Dead
St George will officially remove their no deposit home loan product as of 9th April 2009. This means they will no longer offer 100% home loans to its consumers.
As mentioned in an earlier post back in January, 100% Home Loans – The No Deposit Mortgage is a Dying Breed, it was a matter of time before 100% home loans are removed entirely from the Australian mortgage market. As of the 9th of April this will be the case.
We will also see lenders reducing the amount they will lend against a property. Commonwealth Bank announced this week that they will only lend up to 90% of the properties value for new customers. This follows ANZ, ING and Citibank reducing their lending up to 90% of the properties value.
These policy changes that will make it difficult for home buyers to enter the market.
The next major shift will require applicants to have at least 3 to 5 percent in genuine savings for a minimum of 3 months. This can be in the form of cash in a deposit account, shares or equity in another property to be considered for a loan.
As the major lenders are experiencing unprecedented loan volumes, I can only predict that lenders will continue to tighten their lending policy to reduce their overall risk .
