ING Direct and Citi tighten lending policies on apartments

ING Direct and Citi tighten lending policies on apartments
ING Direct and Citi tighten lending policies on apartments

Citi and ING Direct are both tightening the amount they will lend to property investors and owner-occupiers.

Citi has a confidential list of nearly 260 postcodes nationally that its 'high density unit policy' will apply.

The Australian Financial Review suggested high density is any unit development containing more than 30 units.

The bulk of the postcodes are in Melbourne, Sydney, surrounding inner suburbs and up to 15 kilometres from the central business districts.

It is more than double the number of postcodes that were revealed as being held on Macquarie Bank's similiar constraint list.
recently tightened lending requirements for.

Loan-to-value ratios will be reduced from 80 to 70 per cent.

ING Direct has new guidelines on apartment and units with an internal floor space of less than 60 square meters.
 
Those with an internal floor space of less than 60 square metres – excluding balconies car spaces – and less than five years old will have a maximum loan-to-value ratio of 70 per cent.
 
Apartments with an internal floor space between 50 and 60 square metres – excluding balconies and car spaces  - and older than five years will limit the maximum loan-to-value to 80 per cent.

Both lenders use broker networks to recommend their products.

Firstmac, a non-bank lender with about $8 billion under management, tightened lending for apartments in developments with more than six floors. It has excluded rental income as a source for servicing the mortgage.

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