Buyers getting around restrictions: Broker

Loan-to-value speed limits come into force next month but Christine Lockie, of LoanPlan, said she was already seeing people trying to get around tighter lending criteria.

Banks will be required to limit their lending to people with deposits smaller than 20% to less than 10% of their total mortgage lending.

Lockie said buyers would find a way. "If people want something, they want it and neither the government or the Reserve Bank is going to stop them getting at it. This is an experiment by the powers-that-be and it will go badly – we're already seeing evidence of this."

As well as parents offering their properties as security, she said buyers were looking at second mortgages and private funding. "Of course all these options are higher risk, more expensive and achieving nothing but more debt."

Many banks have hiked the fees they charge buyers with small deposits. Others have slowed their lending to people with deposits of less than 10%.

But broker John Bolton, of Squirrel, said the fees could be eroded if banks upped their competition for borrowers.

"I think there might be a bit of negotiation but only on extremely good deals.  Probably not straight away but as time goes on and the banks emphasise quality."