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ASB brings back investor LVRs

ASB has announced an immediate reinstatement of loan-to-value restrictions on investors, ahead of the Reserve Bank's consultation to reimpose them next March. 

Thursday, November 12th 2020, 5:12PM 2 Comments

The bank has pre-emptively moved to bring back LVRs, a move it said would "support first home buyers".

ASB chief executive Vittoria Shortt said: "ASB believes a balanced and sustainable housing market is in the best interests of all New Zealanders. While we appreciate the RBNZ taking the time to consult, this is about helping Kiwis build their financial futures during exceptionally challenging times so we are choosing to take this step now."

Shortt said the pandemic had not impacted the property market "as anticipated", and said ASB was "witnessing rapid growth in lending volumes".

"The number of applications we’re receiving is at an all-time high, up 70% on this time last year, and while the proportion of first home lending is up, we have observed since Covid-19 a rapid increase in lending for investors. If this increase in investor demand continues it could lead the country down a potentially unsustainable path," Shortt said.

"Our focus at ASB is on working with the Government on offering first home buyers opportunities to get onto the property ladder. That’s why we’re immediately committing to requiring investors to have a 30% deposit rather than the current 20%. Pre-approvals already in place are unaffected.

"For us, it is about being a prudent and responsible lender. We all have to play our part and we’re confident Kiwis looking to buy their first home will welcome this move," Shortt added.

ASB's decision comes after the bank introduced debt to income ratios on mortgages in September. 

The bank is testing borrowers on DTIs due to people accessing "higher levels of borrowing".

Tags: ASB LVR property investment

« Advisers divided on LVR returnANZ reintroduces investor LVRs »

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Comments from our readers

On 13 November 2020 at 7:22 am Skeptical said:
Ha! How nice of them sacrificing business to "support first home buyers".

I am sure it has nothing to do with the gang at 2 The Terrace signalling an early return of LVR restrictions and them needing to curtail this section of their book to rationalise the number of high LVR investors to actually meet the requirements.

Any minute now I'm going to get more emails from other banks wanting to "support first home buyers" I bet.
On 16 November 2020 at 8:31 am krish@mortgagesuite.co.nz said:
This was always on the horizon and expect other banks to follow. In announcing their intention to curb LVR's on investment properties from next March, the Reserve Bank has actually shot themselves in the foot. They have just created a higher level of Frenzy with investors and would be investors trying to buy before next March. The sensible approach would have been to make it effective with immediate effect or not make that statement until March next year.

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.09 3.25 3.39
ANZ Special - 2.49 2.69 2.79
ASB Bank 4.45 2.49 2.59 2.65
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.49 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.09 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
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 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 ▼2.45 ▼2.65
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.99 ▼3.09 ▼3.15
SBS Bank Special - 2.49 ▼2.59 ▼2.65
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.69 2.79
The Co-operative Bank - Standard 4.40 2.99 3.19 3.29
TSB Bank 5.34 3.29 3.29 3.59
TSB Special 4.54 2.49 2.49 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.49 2.69 2.79
Median 4.55 2.94 3.07 2.80

Last updated: 27 November 2020 3:57pm

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