Westpac announced changes in its calculation of the measure of household spending for investors, which could result in an increase in borrowing capacity.
In a statement issued to the dealer network, Westpac said that the HEM band of investors will now be determined by a new formula: the operating costs and interest on borrowing of investors will now be deducted from their income annual gross and gross annual rent. returned.
Prior to this change, leasing costs and interest expense on investment loans were not included in the calculation.
"This change aligns our practice on how the HEM value is calculated for different income brackets.As a result of this policy change, your clients could experience an improvement in their borrowing capacity," said Westpac in a statement.
This change comes after the announcement made by the bank last month that it would increase the maximum loan-to-value ratio for interest-only investor loans.
Investors who purchase an interest only loan will now be permitted to borrow up to 90% of the value of their target property, which will reduce their deposit obligation to 10%.
Westpac also recently announced that it was no longer necessary to refer a separate credit application in cases where expenses exceeded 130% of the HEM's expenses.
Top suburbs:
North Epping
,
Willoughby East
,
Bligh Park
,
Torrensville
,
Harris Park
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