Following a “comprehensive” risk assessment of the Commonwealth Bank’s $270 billion home mortgage book, the CBA has decided to restrict lending to potentially risky property investors by reducing the LVR to 80 per cent for investment home loans, effective from March 20th.
The changes will require residential property investors to bring a 20% deposit to the table before the CBA will lend. On a $500,000 loan, the investor will need to contribute a $100,000 deposit.
The changes follows a decision in January by Westpac to tighten credit on housing loans. The CBA has the largest market share of home loans in Australia.
ยป CBA tightens screws on lending – The Herald Sun, 9th March 2010.
Does mean cold hard cash savings? Or existing equity in another property?
If the screws are being tightened on investors (as they already have been on first home buyers) then the impact of any rate rise is compounded.
I’d suggest that equity in a depreciating asset wouldnt be an option.
We must understand that these bankers are looking to snap up in large numbers physical assets. These assets being different to the non existent money that they created for us to purchase these properties. Non existent – as banks can lend at least 10x any deposit they may hold.We then pay back real money from real labour+interest. It may also be worthwhile noting that the RBA and the Federal Reserve Bank of America are two examples of PRIVATE banking organisations masquerading as government. Their actions are motivated by those that control these institutions and who these people is kept secret. Hardworking ordinary people subjected to these “cycles”and as result pay with their family homes.Banking is a business that needs a radical reform and NOT in the way that the political puppets of these bankers suggest, which is a world bank. We do not require globalisation of this sort ,or any sort really,as it is the bankers that are desperate for it and they are motivated to get it ANY way they can. Politicians are the expendable gophers of these bankers and I am meaning Barrack Obama, KRudd, Gordon Brown , Hilary Clinton etc etc, they are all puppets of these bankers.