Limited low-deposit lending to investors

The bulk of lending to property investors will not be affected by the new loan-to-value restrictions, which come into effect from November.

Friday, September 25th 2015, 6:00AM

by Susan Edmunds

Banks will be heavily restricted in the amount of lending they can do to people purchasing investment properties in Auckland with less than 30% equity.

The rule that no more than 10% of their new lending can go to buyers with a deposit of less than 20% will still apply for Auckland owner-occupiers.

Elsewhere in the country, banks will be able to lend 15% to small-deposit borrowers.

But latest Reserve Bank statistics show few investors are in that under-30% category, anyway.

There was only $868 million in lending over 70% LVR to investors in August, out of total lending of $5.9 billion.

First-home buyers were the second-smallest group of borrowers in the month, after people borrowing for business purposes.

There was $624 million in loans to first-home buyers in the month, $3.251 billion to other owner-occupiers and $1.99 billion to investors.

Just $182 million was lent to first-home buyers with deposit of less than 20%. Most of the low-deposit lending went to other homeowners.

Banks were well below their 10% threshold for lending to borrowers with less than 20% equity – just 6.3% of new loans in the month was in that category.

Tags: Macro Prudential Tools

« Interest rate rise could surprise, economist warnsGlobal factors make for low rates »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

www.GoodReturns.co.nz

© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved