New Zealand’s biggest bank, ANZ / National have just announced, that effective tomorrow, 27th November property borrowers will require a 20 percent deposit on a new home loan application.
ANZ / National commented – “we treat every customer as an individual and there is no “standard scenario”.
The NZ Herald reports – “But from tomorrow, generally speaking, both its ANZ and National Bank brands will not be offering new lending in excess of 80 percent loan to value ratio. This means a mortgage cannot be more than 80 percent of the value of a property.”
They also mention that there are still some circumstances where a “low doc” loan may be considered, however these would only be issued at a maximum limit of 60% of the loan to value ratio. Low Doc loans are typically applied for by people that have difficulty with proof of income and self employed people, who for example may have a seasonal business that does not show a consistent cash flow.
They are, like many banks now indicating that if they do lend beyond 80 per cent loan to value ratio, more likely for existing clients, then an updated registered valuation would be sought.
Over recent months the media have raved on and on about prices coming down, many first home buyers have taken them at their word and sat back and waited. Now instead of a 10% deposit or approx. $30,000, they now need 20% or $60,000 on an average NZ home.
The way I see it, vendors have just had another percentage piece of the pie of potential home buyers, removed from the pool.