I am looking for loan to valuation ratio in AU prior 2008. APRA (Australian Prudential Regulatory Authority) only has up to Mar 2008. Any suggestions? Thanks.
I can only provide an experiential answer on this. Having taken out seven mortgages 2001 to 2004 the loan to value was 90% maximum at my particular institution, although I avoided mortgage default insurance by voluntarily limiting my LTV to 80% maximum. My guess would be that most institutions would devise a LTV in accordance with their own risk policies. By contrast at the time I do remember Northern Rock in the UK were offering self-certified loan to value mortgages at >100% which subsequently proved disastrous.
seems like UK same as AU LVR > 80% subject to mortgage insurance. many media also suspect easy credit in AU that causes many speculative investment, that results in housing boom in AU now. no change from government on tighten up LVR ration though.
Actually in the period you mentioned, credit control by the banks appeared to be tighter in Australia than UK. I encountered LTV>100% in UK heavily advertised but did not encounter this in Australia at that time. So I would be less sure that Australian bank credit policies have contributed to a possible housing boom. Bear in mind also that Australian property has been popular with Chinese investors and the Australian Foreign Investment Review Board has been poor in exercising controls (linked below). So yes we may have arrived at an Australian housing boom, but foreign investment may also be a contributor not just bank lending policies.
Which market subsector are you interested in? Is it owner occupiers or investors, as banks will apply different credit criteria from time to time. Pre GFC (and post) it was commonplace for Australian banks to lend 95-97% LVR on home mortgages and >100% if loans were cross collaterised with other assets. However, loan mortgage insurance (LMI) was payable for anything over 80%.
I understand in Italy it is commonplace for banks to lend >100% to allow for post purchase improvements.
Data is not widely available but is collected by the large mortgage aggregators.
I never know au banks lend >100%, is it for post purchase improvements? also, I am looking at both owner occupied and investment purposes. what are the different criteria bank looking at. I thought they all look at income, equity, expenses etc. can you give me some example of large mortgage aggregators, Westpac, NAB? Thanks.
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