Search Results for: loan to income

A Deeper Dive Into Current Loan To Income Ratios

The enhanced focus on mortgage lending serviceability means that a consideration of the loan to income ratio or LTI is ever more important. In the UK, where LTI calculations are the norm, the Bank of England first introduced limits on high LTI mortgages in 2014. These measures meant that no more than 15 per cent … Continue reading “A Deeper Dive Into Current Loan To Income Ratios”

NAB Trims Loan To Income To 7x

From Australian Broker. NAB has made a change to its home lending policy amid concerns over the rising household debt to income ratio and as APRA zeroes in on loan serviceability. From Friday, 16 February, the loan to income ratio used in its home lending credit assessment has been changed from 8 to 7. “Regulatory bodies have raised concerns … Continue reading “NAB Trims Loan To Income To 7x”

Insights From Dynamic Loan To Income

One of the most powerful tools to assess risk in a mortgage portfolio is dynamic loan to income ratios (LTI). Whilst Loan to Value (LVR) has traditionally been seen as a simple lead indicator of risk, in a rising priced market, risks are hidden, while in a falling market risks suddenly reappear. In any case … Continue reading “Insights From Dynamic Loan To Income”

Latest Loan To Income (LTI) Data

We have updated our core market model with household survey data this week. One interesting dynamic is the LTI metrics across the portfolio. We calculate the dynamic LTI, based on current income and loan outstanding.  This is not the same a Debt Servicing Ratio (DSR), and is less impacted by changes in mortgage rates. It … Continue reading “Latest Loan To Income (LTI) Data”

UK Confirms Loan To Income Mortgage Lending Rules

The Prudential Regulation Authority (PRA) has set out the final rules for the Loan to Income (LTI) flow limit to operate on a four-quarter rolling basis. This applies to banks, building societies, friendly societies, industrial and provident societies, credit unions, PRA-designated investment firms, and overseas banks in relation to their UK branch activities and the … Continue reading “UK Confirms Loan To Income Mortgage Lending Rules”

Getting To Grips With Loan To Income

We think that the ratio of loan outstanding to income (LTI) is a good indicator to assess the health of a mortgage loan portfolio, especially when incomes are not rising fast. In Australia, there is no official data on LTIs, from either the statistical or supervisory bodies, or from individual lenders. We think this needs … Continue reading “Getting To Grips With Loan To Income”

NZ Loan To Income Ratios Higher

The Reserve Bank of NZ released a report today “Vulnerability of new mortgage borrowers prior to the introduction of the LVR speed limit: Insights from the Household Economic Survey.” The paper uses household level data for New Zealand to assess the vulnerability of new mortgage loans to owner-occupiers between 2005 and 2013. They modelled financial … Continue reading “NZ Loan To Income Ratios Higher”

Perth Loan To Income Data By Post Code

Today we continue our series on Loan To Income mapping, based on the results from our household surveys. Looking at the data from the west, we see some interesting differences between post codes. We see higher LTI’s in some of the newer suburbs. You can compare this with the WA mortgage stress data here. One … Continue reading “Perth Loan To Income Data By Post Code”

Brisbane Loan To Income By Post Code

We continue our series on Loan To Income ratios, using data from our households survey with a look at Brisbane. We start with a geomapping of LTIs across the region. The blue areas have the highest ratios. Here is a list of the highest areas across QLD: Here is a list of the lowest areas … Continue reading “Brisbane Loan To Income By Post Code”