ASB has also “temporarily” stopped offering home loans to those with less than 20% deposits

Two of the country’s largest banks have now stopped offering new home loans to customers with deposits below 20%.

ANZ revealed on Monday that it had “suspended” high LVR (loan to value) loans.

Then, in response to a question from interest.co.nz, the ASB said on Tuesday that it had “temporarily” stopped offering new home loans to customers with an LVR of over 80%.

“We currently have a full pipeline of clients who are pre-approved for a home loan with an LVR greater than 80% (less than 20% deposit),” an ASB spokesperson said.

Therefore, to ensure that it continues to meet the Reserve Bank of New Zealand (RBNZ) requirement to have no more than 10% owner-occupied mortgages at this level, the halt temporary has been put in place.

“We continue to document loans for clients currently in our pipeline with an LVR greater than 80% who find a property within their pre-approval timeframe, and we continue to accept applications from clients who meet the LVR exemption criteria. loans from the RBNZ (which includes loans of up to 90% LVR for customers looking to build a new home),” the spokesperson said.

“We will continue to assess our portfolio in line with RBNZ requirements and seek to resume this type of lending as soon as possible.”

Meanwhile, other major banks at this stage do not appear to be following the lead of ASB and the biggest bank ANZ in ‘suspend home loans to those with low deposits.

Westpac, BNZ and Kiwibank say they are still offering loans to those with deposits below 20%.

ANZ confirmed on Monday it was taking a ‘pause’ from lending above 80% of a home’s value The bank had only reinstated loans below 20% in February after being part of a group of large banks take time on low deposit loans last November.

An ANZ spokesperson, in confirming the “pause”, noted that the Reserve Bank’s 10% cap on lending banks can do to customers with less than 20% deposit.

“To comply with these heightened restrictions, ANZ is suspending new home loan applications when the Loan to Value (LVR) ratio is above 80%. Customers with existing approvals are not affected until the date of expiration, when we should apply for the updated policy.”

ANZ’s move comes at a time when house prices have already fallen around 6% from their peak last November – and are set to fall further, as mortgage rates rise ever higher, most rates are now above 5%.

But other banks contacted say they are still offering high LVR loans – although it’s clear this is on a case-by-case basis.

A BNZ spokesperson said BNZ had not changed its low capital parameters “and continues to lend to customers with less than 20% down payment, depending on the specifics of the agreement.”

“All loan decisions are made on a case-by-case basis.”

Westpac says it “regularly” reviews its housing book against RBNZ LVR limits “and currently has no plans to suspend loans to customers with deposits below 20%”.

A spokesperson said Westpac has “a number of options” available to support first-time homebuyers with small deposits, including Family stepping stoneKainga Ora First home loans and Kainga Ora First home partner. Customers might also consider purchasing new construction that is exempt from the high LVR restrictions.

The spokesperson said demand for high LVR loans had been “constant” over the past two months.

Kiwibank’s senior product manager, Home Loan, Pip Maxwell, said the bank was “pleased to be able to continue to support” first-time home buyers with less than 20% home loans on deposit through programs such as as the first home loan, new construction with low net worth and other properties. ways such as Condominiumwhich she said was “another way for Kiwi to gain ownership by associating with friends or whānau to gain access to the ownership ladder”.

“For any LVR loan over 80% subject to RBNZ restrictions, we give priority to Kiwibank customers who have us as their primary bank and are looking to buy their first home. Our home loan specialists can help customers understand the different options that may be available to them.”

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