Banks loosen lending criteria for spring

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Banks are becoming more flexible with lending over the spring months, launching campaigns to get more business.

Thursday, October 21st 2010, 1:49PM 3 Comments

by Jenha White

Squirrel mortgage brokers director John Bolton says banks have made small tweaks that are improving the lending environment with ASB, ANZ/National Bank, BNZ, Westpac and Kiwibank all prepared to lend more than 80% to clients.

On Monday Westpac launched a campaign for mortgage brokers which offers an additional 20% commission for new residential lending approved of $250,000 or more and advanced before the end of the year for both new and existing customers. The offer applies to mortgages with loan to valuation ratios (LVRs) of 80% or less.

Bolton says ASB has also been putting through some 90% loans and case by case 95% in the last month for owner occupiers.

However, he says ASB in particular, looking for high quality clients with it not being a free-for-all and it still being incredibly tough to get more than 80% lending - "clients are generally on good pay, are qualified, have little debt and good equity".

ASB also ran a one-week special recently offering a six-month new lending rate of 5.95% and a 12-month rate of 6.30% which were below the banks advertised rates.

The mortgage had to be worth more than $300,000 though and half the money lent needed to be borrowed on ASB's floating rate.

ANZ and National have also eased their criteria slightly according to Bolton, lending up to 90% in the last eight weeks but more formally between 80% to 90%.

"They've been doing lending in that range for a while but not as formal policy, it was a bit random if it got approved. The servicing calculator has got a bit better too."

ANZ/National are also offering to pay up to $1,000 towards legal costs and waive the application fee for new mortgage applications received and approved between October 3 and November 30 and settled by December 31.

It is also offering mortgage brokers an extra 10% bonus commission for applications received and approved between October 3 and November 30 and settled by the end of the year.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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