CBA to raise maximum LVR on construction loans - 1 May 2025
The Commonwealth Bank of Australia (CBA) has confirmed that it will increase the maximum construction loan-to-value ratio (LVR) on construction loans from 24 May 2025.
Currently, CBA construction loans enable customers to borrow up to 90 per cent for securities valued under $3 million and up to 75 per cent for securities valued between $3 million and $5 million.
However, from Saturday (24 May), the major bank will increase the LVR brackets for both owner-occupied and investment securities to 95 per cent for securities valued at under $3 million.
It will also increase the maximum LVR limit to 80 per cent for securities over $3 million in value and raise the maximum security value for this LVR bracket to $6 million.
Speaking to The Adviser about the change, CBA’s general manager, third party distribution, Baber Zaka, said: “We’re constantly updating our home loan policies to better serve our customers, while maintaining prudent lending standards.
“We are also always seeking opportunities to improve and advance our third-party service offerings in response to feedback from our brokers.
“We believe that broadening our construction loan policy will help brokers to have discussions with customers who are interested in building their homes, while also helping our brokers to expand their portfolios and grow their businesses.”
Earlier this year, it also updated the offering it provides brokers through its tiering system: Platinum, Elite, and Essential.
Source: www.theadviser.com.au