Mystery shop finds Aussie banks have tightened lending criteria but the more aggressive are still prepared to lend 9.4x income for investor mortgages & 6.2x for owner-occupiers

Mystery shop finds Aussie banks have tightened lending criteria but the more aggressive are still prepared to lend 9.4x income for investor mortgages & 6.2x for owner-occupiers

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4 Comments

High time RBNZ puts loan to income measures in place. Unless law is in place, investors wil be able to get high loan and banks too will be tempted for business.

Unless have law will be tough and 6x or 9x is norm and nothing surprising. Very common and easy to get loan and if any problem approach mortage broker for manipulation.

Will RBNZ speed up or still thinking

Agreed loan to income ratios needed. 4 to 1

Reserve bank and govt should manage the bubbles thus reduce the impacts. Dampen the rises will help Dampen the falls. Come on Reserve bank 9 to 1 on investors loans is the wild west.

Loan to income ratios should be different for owner occupiers and Landlords. Maybe 5:1 for the former and up to 8:1 for the latter. The dynamics for the investor are quite different to that of an owner. If things go wonky the investor can sell and take a haircut but the owner occupier is in a more dire situation.
However just let nature take its course. Enough of these constant calls to raise taxes or impose arbitrary restrictions! The people want freedom from meddling.

should be other other way around Zachary. The second group are far riskier especially, in an economic downturn.