November 28, 2018
This morning the Reserve Bank announced it would be making it easier for homebuyers to get loans with deposits of less than 20% in the new year.
Reserve Bank Governor Adrian Orr says,
“both mortgage credit growth and house price inflation have eased to more sustainable rates, reducing the riskiness of banks’ new housing lending. In response, we are easing our loan-to-value ratio (LVR) restrictions on banks’ new mortgage loans. If banks’ lending standards are maintained we expect to further ease LVR restrictions over the next few years.”
From 1 January 2019:
- Up to 20 percent (increased from 15 percent) of new mortgage loans to owner occupiers can have deposits of less than 20 percent.
- Up to 5 percent of new mortgage loans to property investors can have deposits of less than 30 percent (lowered from 35 percent).
This means that banks can approve more loans every month which have less than 20% deposit for own-occupiers. We think this is a very positive step forward to helping those trying to get onto the property ladder.
Read the full press release from the Reserve Bank here.