Banks more willing to lend on mortgages

Would-be housebuyers struggling to scrape together a deposit for a new home have a glimmer of hope, as banks appear to be loosening the purse strings.

Massey University banking expert David Tripe said that, after 18 months of economic downturn, banks would be coming out of their shells lending wise, but "they won't necessarily rush out to advertise it".

"If there's good quality borrowers around, and good business opportunities, they will likely do the business."

Interest.co.nz editor Bernard Hickey also said banks had loosened lending criteria since a crackdown from early last year.

However, both men sounded a word of caution. Lending conditions were - and would remain - tougher than they were in 2007 when lending "exploded" in the lead up to the global financial crisis, Mr Hickey said.

"Before the crisis - 2007 - let's say most banks were lending 90 per cent plus. Now, most banks will only lend 80 per cent or less, although there are exceptions."

To read the full NZ Herald article, click here

Posted: 13 Apr 2010

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