Australia banks tighten mortgage loans amid govt probe, face revenue strain

Citing regulatory concerns went a step further than rivals and lowered the amount it is prepared to lend

Australia’s largest banks have stepped up screenings of mortgage loan applications amid a powerful government-backed inquiry into the nation’s lenders and their sales practices, potentially hurting revenues from their most lucrative products.

National Australia Bank communicated on Friday to mortgage brokers its stricter conditions to assess mortgage applications, according to emails seen by Reuters, becoming the latest of Australia’s ‘Big Four’ banks to do so.

Citing regulatory concerns, the country’s fourth-largest lender by market value, went a step further than rivals and lowered the amount it is prepared to lend - to a ratio of seven times a borrower’s income