ANZ tweaks home loan deposit rule
New Zealand’s biggest bank, ANZ, is offering a reprieve to home loan borrowers with small deposits.
The Reserve Bank last month adjusted the loan-to-value ratio (LVR) restrictions that limit how much low-deposit lending banks can do.
From January, banks will be able to lend 15 per cent of their new loans to borrowers with deposits of less than 20 per cent of the purchase price, up from 10 per cent.
They will be allowed 10 per cent of loans to investors with less than 40 per cent, up from 5 per cent.
Banks also have their own, selfimposed credit criteria.
ANZ has used its allowance of low-deposit loans only for borrowers with at least 15 per cent of the purchase price.
But now, with the rule change, it will also consider those with only 10 per cent.
Mortgage broker Campbell Hastie said the change, although small, would make a difference.
‘‘More deals will be done, no question. It’s quite a significant move – ANZ are the biggest bank and high-lvr lending is a function of book size, essentially … Adding that extra 5 per cent to go to 90 per cent creates a lot more opportunity,’’ he said.
It would take pressure off other lenders, he said.
An ANZ spokeswoman said the change was aimed at helping firsthome buyers.
‘‘This complements other options to build up a deposit that first home buyers might be eligible for, including using Kiwisaver and getting help from family by using existing equity.’’