Banks 'restricting lending' to first-time buyers


Monday 17 August 2009

People looking to compare home loans may be interested to read that several Australian banks are set to restrict lending to first-time buyers.

Some six banks are reported to be cutting their maximum borrowing limits, with a significant reduction witnessed between November 2008 and April this year, the Sydney Morning Herald asserts.

Research conducted by Deutsche Bank has shown that lower home loan limits and cuts in interest rates have prompted more first-time buyers to compare home loans.

However, as a result, ANZ, NAB, Westpac, St George, BankWest and Bendigo and Adelaide Bank have reduced their maximum home loan rates.

St George was found to have reduced its highest rate by $55,000, while Westpac saw a reduction of $33,000.

Few changes were made to the minimum deposits required to take out home loans, however, with average prices of between five and ten per cent of the total house price.

Meanwhile, the Housing Industry Association and Commonwealth Bank First Home Buyer Affordability Index recently revealed that homes are more affordable for those taking out their first home loan.

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