ING Direct is minimising what it perceives is risky lending by putting limits on the Loan to Value Ratios (LVRs) on loans for smaller apartments and units.
A Loan to Value ratio is a term used by mortgage-brokers when calculating your eligibility for a mortgage. It is often a percentage, comparing the mortgage amount to the valuation of the property.
The growing minor bank have introduced reduced lending limits on properties with internal space smaller than 60m².
Apartments and units under 50m² now have a LVR limit of 70 per cent, while those between 50-60m² are limited to 80 per cent.
The internal space does not include balconies or car parking.
The average size of one-bedroom apartments in Brisbane average is approximately 52m², so it is expected that this restrictions will have some impact on lending for purchasers, although it will be limited as a number of large lenders will still happily lend up to and exceeding 80% LVR.