National Australia Bank (NAB) just closed its door to foreign property buyers who do not have Australian income. NAB was the last of the big four to restrict foreign lending after Commonwealth Bank, ANZ and Westpac made similar rules in the past two months.

Until the change, NAB reviewed applications for foreign loans on a case-by-case basis, but it kept a maximum loan-to-value (LVR) ratio of 60 percent, reports Australian Financial Review. The bank’s change in policy is part of NAB’s responsible lending and in response to changing conditions in the market and regulatory requirements.

The changes took effect on Saturday, June 18. An NAB spokeswoman says the foreign property loan segment makes up only a small percentage of the bank’s lending book and it has limited appetite for the segment. To qualify for a property loan, NAB would require the borrower to present proof of existing Australian income.

However, NAB would use a 70 percent LVR for Australian and New Zealand citizens and permanent residents who live abroad. ANZ stopped lending to applicants with no local income because of sloppy applications. Some of the pages of the borrower’s passport were missing, the income came from never-heard of foreign firms and their other documents to support their loans have poor translation.

Commonwealth Bank turns down applications with self-employed foreign currency income, reports Property Guru. For Singaporean borrowers, Westpac said it could offer property loans to nationals and residents of Singapore through NAB’s branches in the Southeast Asian country. However, analysts point out, the loans would have to follow Singapore’s Total Debt Servicing Ratio framework.

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