New Zealand's biggest mortgage lender, ANZ National, has acknowledged it "may miss out on a little bit of business" because of its new policy of requiring a 20% deposit.

But ANZ National CEO Graham Hodges said the other major banks were also informally tightening up on their lending policies to reflect the greater risks of higher unemployment, lower house prices and the lower demand from customers.

"We think its prudent to have a higher deposit in today's market," Hodges said.
The new policy was aimed mostly at new customers and those existing customers looking to top up their existing mortgages using the equity in their homes, he said.

"If there are customers that want to do that (take on more debt with higher leverage) then they'll look elsewhere," said Hodges.

ANZ National's mortgage book grew just NZ$153 million to NZ$53.35 billion in the September quarter, which was less than half the growth shown by Kiwibank and ASB, our mortgage analysis shows.

Meanwhile, Hodges said it was likely many customers would move to shorter fixed term mortgages or variable rate mortgages as interest rates fall, giving the Reserve Bank more monetary policy power.
But this was likely to be a temporary phenomena once interest rates stabilised and started rising again, given New Zealanders' wariness of volatile interest rates on the way up.

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