ME latest to crackdown on foreign borrowers

By |
The Australian lending market continues to become less accommodating to foreign borrowers with another lender unveiling new restrictions on mortgage eligibility.
 
Non-major ME last week became the latest lender to announce that it will no longer allow for the use of foreign income in mortgage servicing calculations
 
In a statement provided to Your Investment Property, ME general manager credit risk Michael Hendricks said the lender was simply keeping in line with the rest of the industry.
 
“Last year we formally restricted mortgage borrowing to Australian citizens/PRs and NZ citizens living and working in Australia, although this has never been a major segment for us,” Hendricks said.
 
“Recently, in line with industry moves, we also formalised our restrictions on the use of foreign income used to service mortgages, including Australian citizens/PRs working or employed overseas,” he said.
 
Hendricks said the fact that a number of Australia’s biggest financial institutions had expressed concern about the validity of foreign claims meant it made sense for smaller lenders to be similarly cautious.
 
“The primary driver for the latter is the ability to verify the foreign income. For a bank our size, it difficult for us to put in place processes at suitable costs to manage this segment,” he said.
 
“These are prudential measures designed to ensure our flow of new business in line with our target market. This is particularly important in light of changes by the majors which can increase demand for smaller banks who haven’t also applied the same policy.”
 
A number of lenders, both non-major and major have announced they will no longer accept foreign currency or income in servicing calculations, with ANZ and Westpac announcing they were investigating whether they had written loans to foreign borrowers on the back of fraudulent foreign income declarations.
 
Following that announcement it was also claimed that foreign borrowers were buying falsified bank statements for as little as $200.
 

Can you afford to buy in this suburb? Find out how much you can borrow

Top Suburbs : newtown , sth toowoomba , mt lawley , nundah , east victoria park

go back

Get help financing your investment



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here