Bank of Melbourne has admitted making an error regarding tightened lending conditions for foreign buyers.
An announcement made to mortgage brokers on 26 April said the
Westpac subsidiary would be decreasing the loan-to-valuation ratio (LVR) for temporary visa residents from 90% to 70%.
However, the bank has since issued a correction, describing it in confidential communications to brokers as a “revised policy update”, according to the
Australian Financial Review, sparking speculation that it had backflipped the earlier policy change.
Mortgage brokers told the
AFR they believed it was part of a strategy to rapidly build market share in a sector that other lenders were beginning to grow nervous about and tighten conditions.
However, a Bank of Melbourne spokesperson told
Australian Broker that the LVR for temporary visa residents, residing and working in Australia and earning Australian income has always been up to 90% and the broker communications was incorrect.
“Nothing has changed for temporary visas and we’ve always loaned up to 90%,” the spokesperson said.
