ANZ has reopened the door for borrowers wanting to buy a home with less than a 20% deposit after shutting it in November, however there is a catch.
A spokeswoman for ANZ, New Zealand's biggest home lender, says effective Monday the bank reintroduced approvals for over 80% loan-to-value ratio (LVR) lending for ANZ customers who meet the bank's lending criteria.
"The pause on over 80% LVR lending was always just a temporary measure which was necessary to help us meet the Reserve Bank’s tightened LVR measures which cap the amount of low deposit lending to 10% of all new loans to owner occupiers," the ANZ spokeswoman says.
However, it's not a free-for-all.
"To help us manage the number of applications and approvals, and ensure we continue to meet the tightened Reserve Bank requirements, we’re opening up on over 80% LVR lending in a considered way. To begin with, we’re reintroducing for approvals only [for] customers who have found a property to make an offer on, not pre-approvals."
Additionally the spokeswoman says ANZ has "a higher uncommitted monthly income requirement at the moment" of $2,500, up from about $1,000. This means borrowers "will need to meet a higher threshold to qualify."
"We often make changes to the uncommitted monthly income requirements in this way," the ANZ spokeswoman says.
ANZ and other banks closed the door on applications for mortgages with under 20% deposits in November. This came after the Reserve Bank confirmed on September 23 that banks would be restricted to doing just 10% of new residential mortgage lending to borrowers with less than a 20% deposit, down from 20% previously. The announcement came after a consultation period starting in early August, with the Reserve Bank pushing out the proposed start date by a month to November 1.
As of September 30 last year ANZ's home loan book stood at $99 billion, with housing lending comprising 70% of the bank's total lending. As of September 30, ANZ had 30.4% market share.
Kiwibank, which also pulled the plug in November, started approving applications with less than 20% deposits again last week.
"We are limited in the amount of lending we can provide with a low deposit and have prioritised our existing customers and first home buyers. At times demand may exceed what we are able to provide, so each request is being reviewed on a case-by-case basis,: a Kiwibank spokeswoman says.
20 Comments
I meant what I said, nothing less nothing more. ANZ is lowering the need for a deposit = allowing people with less assets to borrow but is asking to show better income because it's raising the expenses, so it's appealing to asset poor but cashflow rich people.
I don't do sarcasm or cynicism, most of my posts are very straightforward and literal
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