Reserve Bank Announces Rules for Low Equity Home Loans (20th August 2013)
The Reserve Bank announced that banks will have to restrict new lending with loan to value ratios (LVR's) of more than 80% to no more than 10% of the dollar value of their total new mortgage lending. This will significantly reduce the amount of high LVR loans banks will be able to offer, which will make it harder to obtain a mortgage with a deposit of less than 20%.
Most of the banks have yet to comment on this change, however, it is expected that banks will give priority to first home buyers over those buying rental properties, in terms of lending with less than 20% deposit or equity.
How these new rules affect first home buyers will become clearer over the coming days and weeks. Don't hesitate to contact me at firstname.lastname@example.org to discuss your particular situation.