NAB clamps down on mortgage lending to foreign buyers

National Australia Bank (NAB) has followed its banking rivals by clamping down on mortgage lending to foreign buyers of Australian property, and asking these customers to stump up larger deposits; NAB is to lower the maximum loan-to-valuation ratio for lending to foreign buyers to 60%, from 70%, as well as reducing the amount of "foreign source" income that it will include in loan assessments to 60% from 80%. ANZ, Commonwealth Bank and Westpac have also been cracking down on mortgage lending to foreign buyers. As a result of this move by the big banks, a flood of loan applications to other lenders has reportedly resulted, such as Bendigo and Adelaide Bank.
National Australia Bank is clamping down on mortgage lending to foreign buyers of Australian property, joining other banks in requiring these customers stump up bigger deposits.

NAB on Thursday confirmed it would lower the maximum loan-to-valuation ratio for lending to foreign buyers to 60 per cent, from 70 per cent, as first reported in the Australian Financial Review.

Clients of NAB-owned advice firms were not properly informed about the firms' business relationships with the bank. Credit: Carla Gottgens

The bank is also reducing the amount of "foreign source" income that it will include in loan assessments, to 60 per cent, from 80 per cent, and it will no longer recognise self-employed income from overseas.

"All foreign home loan applications are considered on a case by case basis and assessed under strict verification standards for employment and income, as well undertaking stringent risk processes," a NAB spokeswoman said.