NAB Broker and Advantedge tighten mortgage underwriting

National Australia Bank's third party mortgage distribution businesses, Advantedge and NAB Broker, have made changes to their mortgage lending policies, including higher rates and lower LVR caps for investors and the introduction of serviceability buffers.

Advantedge, which provides white label loans and loan servicing to mortgage managers and brokers, is raising the rate on investment property loans by 15 basis points, effective from Thursday.

Advantedge will drop the maximum loan-to-valuation ratio for investment loans from 95 per cent to 90 per cent on June 13.

It will also apply a serviceability repayment loading to existing mortgage repayments. It did not say what the level of the buffer would be.

Broker distribution business NAB Broker is changing the variable rate for investment loans on Friday. It did not say how much the rate would increase. It is also changing its low-doc rates.

Like Advantedge, it will reduce the maximum LVR on investment loans to 90 per cent and will add a serviceability loading (both effective June 13).

NAB Broker's affordability rate for use in serviceability assessments will be amended to be the higher of 7.4 per cent or 225 bps above the effective borrowing rate.

Both NAB Broker and Advantedge will require customers to provide evidence of non-NAB loan repayments.