The Reserve Bank has announced that from October 1, banks will not have more than 10% of their total loan books in mortgages to customers with equity of less than 20%.
Massey University banking expert David Tripe said that was a tighter limit than had been expected.
NZBA chief executive Kirk Hope said people needed to be aware that they might be declined loans because of the restrictions.
“While the lending restrictions will adversely affect some businesses and householders seeking low-deposit loans, our members are committed to meeting their obligations as registered banks and will comply with new lending requirements.”
He said many small businesses used the equity in their homes to raise capital and the restrictions could make that difficult. “The lending limits may also make it more difficult for first-homebuyers and home-owners seeking a top-up loan for renovations.”
Westpac referred inquiries to the NZBA. Kiwibank said it would prioritise loan applications from first-home buyers over those from investors in the same equity position.
