Banks lending with 10pc deposit
The big banks appear to be allowing more homebuyers to borrow with a deposit of 10 per cent or less as their lending books remain stagnant.
Quarterly financial results revealed this week by ASB Bank, Bank of New Zealand, Westpac and ANZ National Bank showed total mortgages were either flat or declining across the board.
But the results showed an increase in higher-risk lending, with the banks lending a higher per centage of a property’s value.
Mortgage Brokers Association general manager Jenny Campbell said some lenders were loosening criteria on discretion for some individuals, depending on perceptions.
‘‘Lending teams are looking at deals very closely, and if you are a good customer, a good risk, you will get a deal,’’ Ms Campbell said.
None of the banks admitted changing their core lending policies but said they looked at loans individually.
ASB appeared to have one of the most pronounced shifts into riskier lending.
The bank’s mortgage book was down by $ 38 million to $ 37.36 billion in the three months to December, impacted heavily by a $584 million drop in loans below 80 per cent loan-tovalue ratio.
However, mortgages with an LVR between 80 and 90 per cent were up by $140 million and those with an LVR over 90 per cent had jumped by a massive $406 million.
At Westpac, safer loans below 80 per cent were also on the decline, while riskier lending above that threshold had increased by a total of $ 143 million.
Fairfax NZ News