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Banks already introducing tougher rules for property investors

Three banks, and Sovereign, have introduced tougher new LVR rules for property investors, but ANZ, which wants even stricter rules, hasn't moved yet.

Thursday, July 21st 2016, 10:00AM

by Philip Macalister

David Hisco

Although the Reserve Bank is only consulting on introducing tougher lending rules of property investors, four lenders have already implemented the proposed changes.

Westpac was first out of the blocks and it has been followed by ASB, Sovereign and SBS in introducing a maximum LVR of 60% for all new property investment loans.

ANZ chief executive David Hisco says in an opinion piece published in the NZ Herald that the central bank should "heavily increase LVR limits for property investors."

"The Reserve Bank wants most property investors around the country to have 40% deposits in future. We think they should go harder and ask for 60%. Almost half of house sales in Auckland are to property investors. Taking them out of the market will be unpopular amongst investors but it may end up doing them a favour.

"Of course this would mean less business for us banks but right now the solution calls for everyone to adjust."

Westpac says, in a communication to mortgage advisers, that it is making changes to its lending policy to ensure "we are positioned for the new restrictions, announced by the RBNZ on Tuesday." It says:

All property investor applications will be at a maximum 60% LVR or higher if the combined security position includes an Owner-Occupied property.
Owner Occupied policy will remain the same but a 10% nationwide speed limit will apply, rather than just 10% for Auckland and 15% elsewhere.
There are no longer any regional distinctions between Auckland and the rest of New Zealand.
ASB has taken a similar position. ASB head of third party banking, Marc Oliver says, ASB will "no longer provide new approvals for lending >60% LVR solely secured by non-owner-occupied residential properties."

"We will consider applications that exceed 60% LVR where the customer is also providing owner-occupied residential property as security. This reflects the RBNZ’s “Combined Collateral Exemption” arrangements.

ASB will honour all existing pre-approvals above 60% and documented loans for non-owner-occupied property issued before July 21 until their expiry date. "To comply with the RBNZ changes, these are not to be rolled over at the end of their expiry date and customers should be advised of this."

SBS Bank has taken a similar position.

« Westpac cuts off investor lendingHousing market NZ’s biggest domestic risk - RBNZ »

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Lender Flt 1yr 2yr 3yr
AIA 5.95 4.85 5.35 5.65
ANZ 5.94 ▲5.95 ▲6.40 ▲6.59
ANZ Blueprint to Build - - - -
ANZ Special - ▲5.35 ▲5.80 ▲5.99
ASB Bank 5.85 ▲5.35 ▲5.80 ▲5.99
Avanti Finance 5.95 - - -
Basecorp Finance 6.95 - - -
Bluestone 5.89 7.49 8.09 8.19
BNZ - Classic - ▲5.35 ▲5.69 ▲5.99
BNZ - Mortgage One 5.94 - - -
BNZ - Rapid Repay 5.94 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.94 ▲5.95 ▲6.29 ▲6.59
BNZ - TotalMoney 5.94 - - -
CFML Loans 6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Co-operative Bank - First Home Special - ▲4.75 - -
Co-operative Bank - Owner Occ 5.85 ▲4.85 ▲5.35 ▲5.65
Co-operative Bank - Standard 5.85 ▲5.35 ▲5.85 ▲6.15
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.95 5.45 -
Heartland Bank - Online 4.10 ▲4.40 ▲4.90 ▲5.10
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.10 5.00 5.75 -
HSBC Premier 5.89 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.25 4.39 5.09 5.45
Kainga Ora 5.43 4.57 5.58 5.85
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 5.50 5.85 6.19 6.39
Kiwibank - Offset 5.50 - - -
Kiwibank Special 5.00 4.85 5.19 5.39
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society 6.45 ▲5.55 ▲6.15 -
Pepper Money 4.49 - - -
Resimac 6.19 5.60 6.16 6.29
SBS Bank 5.79 5.05 5.69 5.89
SBS Bank Special - 4.55 5.19 5.39
Select Home Loans 4.09 4.29 4.86 5.09
TSB Bank 5.59 5.14 5.79 6.15
TSB Special 4.79 4.34 4.99 5.35
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 5.74 4.95 5.75 -
Westpac 5.94 ▲5.95 ▲6.29 ▲6.59
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.94 - - -
Westpac Special - ▲5.35 ▲5.69 ▲5.99
Median 5.85 5.00 5.69 5.99

Last updated: 23 June 2022 9:02am

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