Although funding constraints have meant that only a few lenders now offer High LVR loans, demand for the products continues to surge, rising 250 per cent since the start of the year.
According to data from Loan Market Group, demand for both High LVR loans and 100 per cent loans has doubled since the end of the boosted federal government First Home Owner’s Grant.
“Despite the removal of the expanded grant scheme at the end of December, there is still a huge amount of enquiries from people looking to enter the property market,” the brokerage’s chief operating officer Dean Rushton said
“However, the major lenders have no appetite for this type of lending and there is little room to move for applicants who do not fit the box.”
Last year, many lenders reduced their maximum LVR’s to as low as 85 per cent.
Mr Rushton said buyers had been able to use the boosted grant as a contribution to their deposit but this had become more difficult since the concession returned to its traditional level of $7,000.
“This has made it much more difficult for first time buyers,” he said.