NAB makes borrowing harder for property investors

APRA’s crackdown on home lending has prompted NAB to advise tightening to its lending policies, effective 5pm on Friday 5 June 2015.

New variable rates will apply for investment loans, according to communication from NAB to mortgage brokers, obtained by Australian Broker.

The new changes will apply within National Australia Bank's third party mortgage distribution businesses, Advantedge and NAB Broker.

The new investor loan variable rates range from 4.53% to 4.96% depending on the loan amount and LVR. 

For investor loans of $250,000 to less than $500,000, with an LVR up to 90%, the variable rate will be 4.63%.

For loans less than $250,000, with an LVR up to 90%, the new variable rate will be 4.83%. 

Effective Saturday 13 June 2015, the maximum LVR (including LMI capitalisation) for investment loans will be reduced to 90%.

Also effective Saturday 13 June, a loading will be applied on existing mortgage repayments as part of the serviceability assessment. This applies to existing loans which are not being refinanced or paid out as part of the application. 

The affordability rate used in the serviceability assessment will be also be amended, effective Saturday 13 June, to be the higher of 7.40% or 2.25% above the effective borrower rate. Currently a 7.40% affordability rate is used for all applications.