ANZ Increases LVRs

Effective Monday 6 September 2010 the maximum Loan to Value Ratio accepted by ANZ for Home and Residential Investment Loans will change to reflect the following:

• For eligible existing lending customers, the maximum Loan to Value Ratio is 95%, with the option to finance the LMI premium up to a maximum of 97%
• For all other customers, the maximum Loan to Value Ratio is 90%, with the option to finance the LMI premium up to a maximum of 92%

The above changes to Loan to Value Ratio replace the policy rules that were implemented in April 2010 which allowed existing customers, who met specific criteria, to extend the LVR to 95% (inclusive of premium).

New Criteria: Definition of an eligible existing lending customer

At least one of the applicants must be an existing ANZ customer who has held a retail lending product for greater than 6 months with satisfactory credit history. A retail lending product is defined as a home or residential investment loan (including lines of credit), personal loan, credit card or overdraft facility. Existing customers of other retail products are not eligible under this policy.

Eligible Home and Investment Loan Products

Products eligible for a maximum LVR of 95% include all ANZ home and residential investment loans, excluding Equity Manager and the ANZ Portfolio Facility, which continue to have a maximum LVR of 90%.

Additional conditions and information

• All applications over 90% LVR require a Full Valuation
• Total Mortgage Lending (TML) requirement of $500,000 is no longer applicable
• Other standard ANZ credit policies apply

Why are we making this change?

In late 2008 ANZ tightened lending standards in response to the softening in the economic environment because as a responsible lender, we did not want to put our customers in a situation where they were over extended. As the economy outlook has improved and customers continue to manage repayments well overall, we are now in a position to moderate these standards for existing retail lending customers with good credit history. In April 2010, an interim step was taken to service a small number of customers through a manual approval process.

ANZ are now in a position to extend this policy to a wider customer base with the full support of systems and tools. This will remove some of the restrictions imposed in the April 2010 changes. This now means that all existing retail lending customers, with a satisfactory credit history, have the option to borrow at a higher Loan to Value ratio.