Mortgages

New-to-bank lending freeze

Banks have stopped taking on new borrowers above 80% LVR, despite the end of loan-to-value ratio restrictions last month.

Wednesday, June 17th 2020

NZFSG's Bruce Patten

Banks across the board have tightened their criteria for new borrowers, putting a strain on home buyers in the wake of Covid-19.

Advisers report Westpac was the last big bank to stop taking on new borrowers over 80%, changing its strategy last week. In most cases, customers are stuck with their existing bank, with no option to shop around.

Lenders are shying away from higher LVR borrowing and focusing on existing customers and processing hardship and deferral requests, advisers say.

"Literally no-one is doing over 80 new to bank at the moment, but it will open up again," says NZFSG's Bruce Patten. "But once the banks are comfortable with the housing market they will be all over them again."

"The banks are having too many problems dealing with new to bank clients at the moment, and want to support existing clients.

"They have enough work processing clients to interest-only and payment holidays. The staff also have their hands full with reduced hours," Patten adds.

Brokers report banks are also getting tough on increasing debt on existing customers.

Glen McLeod of Edge Mortgages is attempting to find a lender who will do 90% LVR for an owner-occupied property. The client already has an investment property but wants a home to reside in.

"That is where it is definitely getting quite difficult. I’ve spoken to a number of lenders and they will not take on a 90% under occupied loan where the client already has an investment property. Adding in the fact that over 80% requires existing customer status makes it extremely difficult."

Comments

No comments yet

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.