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Easing of LVR restrictions lifts first-home buyer enquiries

Mortgage advisers are reporting an uptick in enquiries from first-home buyers following the Reserve Bank easing its loan-to-valuation (LVR) restrictions from June 1 in the area that most affected first-home buyers.

Thursday, June 8th 2023, 6:00AM

Squirrel chief executive David Cunningham says interest from first-home buyers picked up six to eight weeks, particularly in Auckland and Wellington.

“We've sensed a turning of mood in the housing market and that continues, although it's challenged by the fact that banks have put their mortgage rates up,” Cunningham told TMM Online.

“It's part of a wider lift in interest in the market that was already emerging,” he said.

Century 21 Financial's Julius Capilitan says his enquiries from first-home buyers have jumped in the last 30 days from four a week to nearly 10 now, although that has yet to translate into actual mortgage applications.

He notes banks have reduced their criteria in the last three weeks for uncommitted monthly income, “and that's given clients more accessibility to be able to essentially get more borrowing,” Capilitan says.

But on the other hand, banks have also raised their test levels – ANZ is now requiring customers to be able to cope with paying 8.75% in interest from its previous 8.6% level, he says.

“It's a little bit like smoke and mirrors.”

Bruce Patten at Loan Market says he's also seeing a lift in enquiries and attributes that to media covering of the easing in LVR restrictions.

“But it's still very up and down with the market,” Patten says. “I still think we have some way to go before we see a pickup in prices or a levelling of the marketing.”

Nigel Perkins at Haven Mortgages says he's seen an uptick too “but we have yet to see it translate into specific activity.”

Still, about 40% of the loans his group wrote in the last month were to first-home buyers with between a quarter and a third being high LVR loans.

RBNZ announced on April 26 that it was proposing to ease LVR restrictions and confirmed on May 26 that it would do so from the beginning of this month.

Owner-occupiers with less than a 20% deposit can now account for up to 15% of each bank's mortgage lending, up from 10% before the restrictions were eased.

RBNZ imposed the 10% lending limit for high LVR lending from Nov 1, 2021 which has since proved to have been the peak of the housing market.

First-home buyers had accounted for more than 76% of high LVR lending before that restriction and it has a dramatic impact on high LVR lending since – it had averaged $589.8 million a month in the six months ended October 2021 and had dropped to $312 million in February 2022, according to RBNZ data.

Tags: first home buyers

« New data shows steep declines in new mortgage lendingAnother major player sees uptick in first-home buyer activity »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.45 7.05 6.85
ANZ 8.64 7.99 7.69 7.49
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.39 7.09 6.89
ASB Bank 8.64 7.45 7.05 6.85
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.35 7.05 6.85
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.95 7.65 7.45
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.10 - -
Co-operative Bank - Owner Occ 8.40 7.30 7.05 6.85
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.80 7.55 7.35
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.99 6.85 6.65
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.85 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.59 7.29
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.35 8.05 7.79
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.35 7.05 6.89
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.90 7.75 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 8.05 7.65 7.29
SBS Bank Special - 7.55 7.15 6.79
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 7.05 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.19 7.89 7.65
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.39 7.09 6.85
Unity 8.64 6.99 6.99 -
Wairarapa Building Society 8.60 7.15 6.94 -
Westpac 8.64 7.99 7.59 7.35
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.39 6.99 6.75
Median 8.64 7.45 7.40 6.87

Last updated: 6 December 2023 12:52pm

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