ME Bank changed its first home buyer loan valuation ratio (LVR) cap this week, bringing it in line with other banks.
The Bank increased its LVR cap for first home buyers from 95 per cent inclusive of loan mortgage insurance (LMI) to 97 per cent inclusive of LMI.
ME Bank will continue to apply an LVR of 95 per cent inclusive of LMI for all other borrowers including interest only loans.
Nick Vamvakas, Group Executive Risk, said the change is a targeted response to a need being expressed by first home buyers.
“The move to our first home buyer LVR cap brings us level with other banks already offering a 97 per cent LVR for first home buyers.
“We want to give first home buyers a better chance of buying a first home and bring forward the time they need to wait to get into a home.
“We’ve been receiving feedback from brokers that a small increase in the LVR would help many first home buyers to get into the market.”
ME Bank has historically maintained very high lending standards and the Bank’s arrears are between 15 per cent and 30 per cent lower than the industry average.
First home buyers are a small proportion of total new ME Bank customers.