Westpac cuts off investor lending

Westpac has acted early and stopped taking any applications for investor loans with less than 40% equity.

Wednesday, July 20th 2016, 5:56PM

The Reserve Bank announced yesterday it was considering restricting banks to no more than 5% of their new lending to investor borrowers with less than 40% equity.

It asked that banks comply with the spirit of the rule straight away.

Westpac said it was taking action ahead of time.

"There is a shorter transition period allowed for banks to meet the RBNZ’s requirements than in 2013 and 2015 when there was a six-month period to make all the necessary adjustments and comply. The new regulations announced yesterday are expected to come into effect in less than six weeks, with the RBNZ asking banks to act within the spirit of the new regulations immediately," a spokesman said.

"Westpac has already signalled it will work in the spirit of the new regulation. To do so, and given the period allowed for adjustment, we will not take new loan applications, beyond the revised 60% LVR restriction, from property investors from 4.30pm today. Those with pre-approvals will still be assessed as per the usual process."

Tags: Westpac

« How the Reserve Bank makes OCR decisionsReserve Bank signals more OCR cuts »

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