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ASB joins ANZ in LVR cuts

ASB has joined ANZ in halting the supply of high Loan to Value Ratio (LVR) loans.

Wednesday, June 29th 2022, 10:34AM 1 Comment

by Eric Frykberg

The Reserve Bank requires banks to control the number of loans where customers have less than a 20% deposit.

No more than 10% of the value of owner-occupier mortgages is permitted to be made available at that level.

As the value of loans approaches the 10% level, banks fear they might breach the cap as loans work their way through the system, and so will often put a pause on such loans until the pressure eases.

The ASB has now done this.

“We currently have a full pipeline of customers who are pre-approved for a home loan with an LVR above 80 percent (less than 20% deposit),” the bank said.

“To ensure we continue to adhere to the Reserve Bank requirement to have no more than 10 percent of owner-occupied mortgage lending at this level, we have temporarily stopped offering new home loans to customers with an LVR of more than 80%.”

ASB said it would continue to document loans for customers currently in its pipeline with an LVR above 80 percent as long as they find a property within their pre-approval timeframe.

It added it was still taking applications from customers who met the RBNZ’s high LVR exemption criteria, such as customers wanting to build a new home.

ASB said it would resume high LVR lending as soon as it could.

Earlier, the ANZ made a similar decision. 

It gave the same reason as ASB and added customers with existing approvals would be unaffected pending the expiry date of their approval.

As with ASB, new builds would be treated differently.

Kiwibank took a softer view, but indicated it still had concerns, saying for any over 80% LVR lending that is subject to RBNZ restrictions, it would prioritise Kiwibank customers who already use it as their main bank and were looking to buy their first home.

It said high LVR loans might also be available to customers under other schemes such as teaming up with friends or family to get onto the property ladder.

Westpac said it regularly reviewed its housing book against the RBNZ LVR limits and currently had no plans to pause lending to customers with deposits of less than 20%.

BNZ also had no plans to change its practices. But it stressed all lending was done on a case-by-case basis.

Tags: ASB

« Former Westpac exec to head up NZHLWestpac third bank so suspend lending »

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Comments from our readers

On 1 July 2022 at 10:51 am Amused said:
ASB previously communicated to mortgage advisers on the 16th May that they weren’t lending to customers now with less than a 20% deposit and that all their high LVR >80% traffic lights were set to RED. RBNZ High LVR exemption criteria still applied.

Since this email on the 16th May advisers have received no subsequent update from ASB about their traffic lights having changed. I’m a bit confused then as to why ASB have stated that they have now followed ANZ when clearly they were the first bank to make this decision weeks ago.


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Lender Flt 1yr 2yr 3yr
AIA 6.35 5.25 5.45 5.99
ANZ 6.34 5.59 6.05 6.29
ANZ Blueprint to Build - - - -
ANZ Special - 4.99 5.45 5.69
ASB Bank 6.35 ▼4.99 5.45 5.69
Avanti Finance 6.65 - - -
Basecorp Finance 7.25 - - -
Bluestone 6.89 - - -
BNZ - Classic - 4.95 5.39 5.69
BNZ - Mortgage One 6.39 - - -
BNZ - Rapid Repay 6.39 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 6.39 5.55 5.99 6.29
BNZ - TotalMoney 6.39 - - -
CFML Loans 7.25 - - -
China Construction Bank - 5.35 5.80 5.99
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 4.89 - -
Co-operative Bank - Owner Occ 6.25 4.99 5.39 ▼5.69
Co-operative Bank - Standard 6.25 5.49 5.89 ▼6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 ▼4.79 ▼5.15 ▼5.14
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.50 5.60 6.00 -
HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 ▼4.79 5.15 ▼5.69
Kainga Ora 5.85 5.31 5.58 5.97
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 ▼6.59
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 ▼5.69
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society ▲6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 ▼5.39 ▼5.79 5.99
SBS Bank Special - ▼4.89 ▼5.29 5.49
Select Home Loans 6.89 - - -
TSB Bank 7.05 5.65 6.09 6.39
TSB Special 6.25 4.85 5.29 5.59
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
Lender Flt 1yr 2yr 3yr
Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 5.55 6.05 6.29
Westpac - Offset 6.39 - - -
Westpac Special - 4.95 5.45 5.69
Median 6.34 5.33 5.79 5.83

Last updated: 15 August 2022 8:19am

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