ANZ National tightens mortgages - 20pc deposit needed

ANZ National, the largest bank in New Zealand, is requiring people buying a house to have a 20 per cent deposit.

The policy, which applies from tomorrow to new loan applications, is a tightening from its previous position of a 10 per cent deposit.

Mortgage brokers said tightening of lending criteria is a trend and other lenders already require a 20 per cent deposit or offer a better interest rate for such loans.

The bank said each customer was treated as an individual and there was no "standard scenario".

But from tomorrow, generally speaking, both its ANZ and National Bank brands will not be offering new lending in excess of 80 per cent loan to value ratio. This means a mortgage cannot be more than 80 per cent of the value of a property.

"In some specific circumstances we may be in a position to lend above 80 per cent but customers will be required to demonstrate an undoubted ability to service the loan in the event of changed financial circumstances," the bank said.

David Tripe, director of Massey University's Centre for Banking Studies, said the move was understandable in a falling property market.

To read the full NZ Herald article click here

Posted: 27 Nov 2008

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