Australia: 95% Loan-to-value-ratio is too high for residents

Posted by Sean Lim on March 20, 2017

LTV is too high
In the midst of the talk on possible interventions, it's worth to take another look at the financing available in Australia.. With that perspective, you may think that Australia mortgages for offshore foreigners are already strict compared to the high 95% LTV for residents.


How does 95% LTV stack up against others?

Residents qualify up to 95% LTV while Permanent Residents can try up to 90%. Onshore foreigners who are residing and working in Australia can obtain between 80%-90%. Offshore foreigners who reside and work outside Australia qualify for maximum 70% LTV.

95% is a very high loan-to-value ratio with just 5% downpayment. first time home buyers find 95% a comfortable LTV and will be unhappy if it goes lower. On the other hand, this seemingly lax lending critieria is fuelling loans for investment properties by residents. With the varying LTV for different applicants statuses, it's perhaps fair to reason that offshore foreigners would not be an appropriate target (for now) if measures are implemented.

The Real Estate Institute of New South Wales recently weighed in on the hot property market. They commented that 95% LTV is dangerously high and also expressed their disappointment at Reserve Bank of Australia's property warnings.

If you like this information and is looking to compare rates, have a look at our Australian mortgage page or view our extensive Australia housing Portfolio.



New Call-to-action

New Call-to-action 

Topics: Australia

Written by Sean Lim

Testimonials for FAHL

"I am most impressed by Sean's professionalism in assisting to put in place a mortgage plan that totally meets my investment objectives. His enthusiasm and passion for what he does is remarkable. I hope there will be more mortgage brokers like Sean and his colleagues in Singapore." - Ann Tay, Jan 2017"

"I would like to register my compliments for Maggie. I started enquiring about loans since June/July last year and Maggie has been diligent in following up with me and in addressing all my questions. I recently only settled the bank loan. Throughout this period of several months, Maggie has been patient, proactive and prompt.  It is a delight working with her." - Irene

"You have given good advice, Maggie. Your website is the easiest to follow to get list of documents. We prepared according to the website and it is easy for us to understand." - Shally Tan

Subscribe to Email Updates