Home loans in Australia for which borrowers could borrow up to 95 percent of the total value of the house have started to reappear in the Australian mortgage market, as non-bank lenders try to lure first-time homebuyers away from major banks.
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Last week, Hemisphere Financial Solutions announced a mortgage loan with a 95 percent loan-to-valuation ratio.
The new lender, which was recently launched in February, is backed by wholesale funder Resimac. It said that the company is working to revive the competition in the mortgage market, and high LVR was a sign of increasing stability in the marketplace.
Most major banks in the country have pulled back from the home loan market this year, following the increase of their market share due to the global credit crunch.