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New LVR rules kick in

Banks have had to cancel some preapprovals for investors, which were issued before the recent change to loan-to-value restrictions.

Monday, October 3rd 2016, 12:00AM

by Miriam Bell

New LVR rules mean investors throughout the country now need a 40% deposit to buy investment property.

Previously, they had needed 30% in Auckland and 20% elsewhere.

Although banks were instructed to act in the spirit of the rules when they were first announced in July, the official start date was pushed back from September 1 to October 1 after banks called for more time to adjust.

Still, some investors with outstanding approvals, issued before the rule change was signaled, will now find they cannot call on those funds.

BNZ said it would no longer honour any investor conditional approvals for more than 60% lending as of October 1, in line with the Reserve Bank’s rules.

ANZ said it had not cancelled any preapprovals without customer consent but had to change the terms of some, in consultation with customers, so that they had an LVR below 60%.

But ASB said it had been acting in the spirit of the rules for some time and had been able to honour all residential property investment preapprovals and approvals under the terms that had been offered.

A Westpac spokeswoman said the information was commercially sensitive and not something the bank would release.

Loans for new builds are still exempt from the LVR rules.

The rules do not apply retrospectively but will affect any investors who want to top-up their lending. Applications for lending against an owner-occupied property, owned by a landlord, are affected if there is a residential investment property in the same lending mix.

A sale will not necessarily trigger a bank to reassess lending under the rules, although there has been anecdotal evidence reported that some lenders are asking borrowers to reduce their LVRs when they sell a property.

« OCR call sticks to the scriptNavigating the new LVRs »

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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 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 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

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