ASB cancels preapprovals

The bank has announced it is withdrawing its preapprovals for buyers with deposits of less than 20%.

An industry source said it was likely because the bank had overcommitted itself in the high LVR space and needed to quickly rein in lending ahead of new LVR speed limits.

He said other banks would probably follow suit.

From the beginning of next month, banks will have to keep their lending to customers with less than a 20% deposit to no more than 10% of their total loans.

An ASB spokesman said people who had been preapproved would need to reapply.