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Debt to income tool not dead, unfortunately

Friday, June 9th 2017, 10:13AM

It seems the Reserve Bank is still pretty keen on getting the debt-to-income ratio tool into its kitbag to try and control the housing market. 

Yesterday it released a discussion document on the proposal which is well worth reading. It feels that this tool is unnecessary, especially as there are clear signs the housing market is slowing down, most notably in Auckland.

All mortgage advisers should be very wary of this tool as it will, if deployed, impact of an advisers' ability to provide a valuable service to clients.

I can only hope that the DTIs will not see the light of day. If I was a betting man I'd wager Finance Minister Steven Joyce would not OK such a measure so close to an election. As we are seeing today in the UK elections can be volatile and unpredictable things.

When will lenders agree on a platform?

The other big story is Westpac killing off its online application process for mortgage advisers.

If there is one thing the banks in New Zealand should agree on it is the need to adopt a universal online application process like they do in Australia. The biggest issue for all in the industry is slow turn around times and what the banks call their deferment rates, ie: the percentage of applications which are returns to advisers because they are incomplete.

A decent, universal, online system would address many of these issues.

HSBC's possible return

Last week we asked you if you'd welcome the return of HSBC to the mortgage adviser market. The large majority of you said yes, especially as they often have some of the best rates in the market which could save borrowers significant sums of money.

This week's question

Do you think the RBNZ should introduce DTIs and if they do what impact would they have on your business? You can email your thoughts to editor@tmmonline.nz

- Philip Macalister

Tags: DTIs

« A voice for the little guys; Another bank to enter broker marketRFAs need to sit up and take note »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone ▼3.49 ▼3.49 ▼3.49 ▼3.49
BNZ - Classic - ▼2.55 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 13 July 2020 7:38am

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