Lenders have continued to tighten their lending standards this year, with less variability in standards, according to new research.The tightening has resulted in a moderation in housing volume growth. At the same time lenders are competing aggressively for high quality business and this is cutting into margins.Macquarie Securities has released the results of a shadow shopping exercise involving ten banks. It found that the most conservative lender was prepared to lend 6.8 times income for investment loans and 5.3 times income for owner-occupier loans. The most aggressive lender was prepared to lend 9.4 times income for investment loans and 6.2 times income for owner-occupied loans.For owner-occupiers, the lenders in the sample were lending an average of around A$600,000 (assuming income of around $105,000). This was ten per cent down on last year.For investors, lenders' capacity was around $800,000, which was also ten per cent down on last year.Loan-to-valuation ratios of 95 per cent are still readily available for owner-occupiers but investors are being limited to 90 per cent.Macquarie said Westpac was the most conservative lender and St George's standards were more closely aligned with its parent's than previously.CBA and Bankwest were at the more aggressive end of the spectrum.Macquarie said all the banks were competing for higher quality lending, offering discounts of as much as 140 bps for the right loans. The level of discounting has increased over the past year and it is putting pressure on returns.Based on the current level of discounting, Macquarie estimates that the majors' return on core equity tier one capital is around 12 per cent on the owner-occupier portfolio and 18 per cent on the investor book. With the average return on the back book around 30 per cent, this suggests that the blended return across the mortgage portfolio is now around 14 per cent."We expect ongoing regulatory scrutiny to put further pressure on banks' appetite in riskier segments," Macquarie said.These segments include high LVR lending, interest-only lending to owner-occupiers and lending outside serviceability parameters. "We expect moderation in housing volume growth to be sustained. We believe that owner-occupier and investor lending limits are likely to converge over time," it said.