Smack in the face of a US housing bust and an enormous property bubble in Australia, Australian lenders are offering up to 105% mortgages.
It is amazing to see sheer stupidity played out on the assumption "It's Different in Australia".
Please consider Lenders back to throwing cash at buyers
Next month, non-bank lender Mortgage House will offer a home loan equivalent to 105 per cent of the property's value - the most generous deal since the global financial crisis kicked in three years ago.
The company also offers a 99 per cent loan-to-value ratio loan, which it launched last month, and says applications have been flooding in. "Demand is really strong; people are finding it difficult to save substantial deposits" Mortgage House CEO Ken Sayer said.
Last week, Westpac raised its LVR for new customers from 87 per cent to 92 per cent, reversing the cut it made back in January; while ANZ also last week raised the maximum LVRs from 95 per cent to 97 per cent for existing customers, and from 90 per cent to 92 per cent for new borrowers
Westpac denied it was fuelling house-price growth and said the falling unemployment and strong economy were behind its decision.
"This change reflects our growing confidence in the economic environment, reflected in the low level of delinquencies for this market segment," it said.