Mortgages

Bank LVR limits on hold

Banks have not relaxed loan-to-value ratio limits for investors, despite the Reserve Bank's move to scrap LVR rules.

Thursday, June 04th 2020

While the Reserve Bank ended LVR speed limits last month, the big four banks are said to be sticking to their internal LVR limits.

Multiple advisers have told landlords.co.nz's sister publication, TMM Online, that the big four are not accepting investor loans above 70%, with a handful of exceptions.

The lack of flexibility on investor LVRs has frustrated advisers, who hoped the lifted restrictions would  boost buyer activity.

The Reserve Bank suspended LVR restrictions for 12 months to kick-start buying activity in the wake of Covid-19.

One adviser says Kiwibank was the only lender regularly offering above 70% LVR to investors: "They are the only bank taking these deals and are doing a lot of them. But unfortunately they don't have relationships with a lot of advisers."

Advisers hope lenders will take a more flexible approach to investors in the coming months, with market activity set to drop as buyers assess their financial future.

Some believe the banks will re-assess their approach as the economic impact of Covid-19 becomes clearer.

One adviser says: "I think we might see some banks go to 80% for investors shortly, particularly BNZ and ASB. Banks have to get their systems around the changes and usually have limited appetite as we head into a recession.

"They will have to look at things on a case by case basis, rather than LVR. For example, someone on solid income with a 20% deposit will be a stronger borrower than someone in the tourism sector who has a 30% deposit. It's only a matter of time before they say 20% is okay, because they have to make money," the adviser said.

Banks are likely to review their lending policies in the coming months.

A Westpac spokesman says: "We have made no recent changes to our lending policy for property investors. We continue to approve applications on a case by case basis, including some above 70% LVR. We regularly review and update our lending policies to help us better serve our customers."

Read more:

Reserve Bank ends LVR restrictions

BNZ tightens lending policy

Comments

No comments yet

Heartland Bank - Online 1.99
The Co-operative Bank - First Home Special 2.09
HSBC Special 2.25
ICBC 2.25
HSBC Premier 2.25
Kainga Ora - First Home Buyer Special 2.25
AIA 2.29
TSB Special 2.29
The Co-operative Bank - Owner Occ 2.29
SBS Bank Special 2.29
Westpac Special 2.29
Heartland Bank - Online 2.35
ICBC 2.35
HSBC Premier 2.35
TSB Special 2.49
SBS Bank Special 2.49
The Co-operative Bank - Owner Occ 2.59
BNZ - Classic 2.59
ASB Bank 2.59
AIA 2.59
China Construction Bank Special 2.65
Kiwibank Special 2.65
HSBC Premier 2.89
TSB Special 2.99
AIA 2.99
Westpac Special 2.99
ICBC 2.99
ASB Bank 2.99
China Construction Bank Special 2.99
BNZ - Classic 2.99
SBS Bank Special 3.19
Kiwibank Special 3.19
The Co-operative Bank - Owner Occ 3.19
Heartland Bank - Online 2.50
Resimac 3.39
Kiwibank - Offset 3.40
Kiwibank Special 3.40
Kiwibank 3.40
Bluestone 3.49
Select Home Loans 3.49
ICBC 3.69
The Co-operative Bank - Standard 4.40
The Co-operative Bank - Owner Occ 4.40
Kainga Ora 4.43

More Stories

North Shore’s a sure thing

Thursday, April 15th 2021

North Shore’s a sure thing

Auckland’s North Shore is booming, writes Joanna Mathers, and development potential opened up by the Unitary Plan is the focus for many.

Mortgaged investors still buying, but the game has changed

Wednesday, April 14th 2021

Mortgaged investors still buying, but the game has changed

March has continued a record peak for investors buying residential property.

Pandemic shifting the dial on residential design

Tuesday, April 13th 2021

Pandemic shifting the dial on residential design

From master planning entire communities to interior design, Covid-19 is reshaping the way developers, architects and designers are looking at houses and the environments around them.

Landlord polls: Rents will lift, sales will be low

Friday, April 09th 2021

Landlord polls: Rents will lift, sales will be low

Three recent landlord polls show the majority are going to lift rents in response to the Government’s decision to scrap mortgage interest deductibility against income.