Non-major lender CUA last week announced it is altering its lending policies to make it easier for people to access finance for apartment purchases, with the majority of changes targeted at the owner-occupied market.
“On the whole, these changes are designed to help more apartment buyers to qualify for a CUA home loan,” CUA general manager of sales Andy Rigg said.
“Some of the changes are also designed to manage the risks from forecasts of an apartment oversupply in some Australian cities in the coming two years,” Rigg said.
The changes include CUA changing its definition for what it considers to be high density apartments.
Borrowers will be subject to the same criteria as those purchasing a house and won’t need to meet the tougher high density apartment lending criteria if their purchase is in a block that contains less than 50 apartments or is six stories or less.
Previously, high density restrictions applied to apartments that in a block of 30 or more apartments or were more than four stories high.
More first home buyers will now able to purchase an existing apartment for owner occupied purposes, with the maximum LVR increased by an extra 10%, to 90% (or 85% for a new unit) with lenders mortgage insurance
CUA also announced it will adjust the maximum LVR for high density apartments valued at up to $1 million. Caps will vary based on whether it is a new (up to 12 months old) or existing apartment, and will also depending on whether the purchaser is an owner-occupier or investor.
Rigg said many of the changes were aimed at specifically helping first home buyers; however he also said the new lending policies will also better reflect the fact that apartments are becoming an increasingly popular choice for home owners.
“We’ve reviewed our lending policy so that we can provide additional financial options to our members in what is a popular and growing segment of Australia's property market.
“Many people looking to purchase an apartment are first home buyers and we know how hard it can be for them to save for a deposit and get a foot in the door of the property market.”
