Say person A has saved $50,000 deposit, and lets assume all fees , mortgage insurance if applicable is paid..
So $50k as a deposit. The persons income is sufficiant to service any of the below loans...
Bank number 1 lends 95%...so a mortgage of $950K and a property worth $ 1 million...
Bank 2 lends 90% so a $450k mortgage and a 500K property..
Bank 3 lends 80% so a $200K mortgage and $250k property.
As the banks tighten the lending % so house values will fall, as even though people may have servicability...the banks wont lend them the money..
And you can see just how rapid the size of the loan can grow with a few % points difference ..
Now banks revaluing invetsment property owners are starting to hit owners with more deposit, or lenders insurance... or they have to sell...this will cause more properties to be put on the market..in my opinion only...dyor
