Banks' tougher lending rules in tune with economic times

It's an ill wind that blows nobody any good, as the saying goes. Homeowners with big mortgages must have been reflecting on the truth of that dictum in the past few weeks.

The decline in interest rates is not unalloyed good news, since many people - particularly those on fixed incomes - rely on interest income. But declining rates are good news for those wanting to borrow.

Would-be first home buyers were entitled to share in the relief - until last week when the country's largest banking group, ANZ/National, announced that applicants for mortgages would need to come up with a deposit of at least 20 per cent.

Other banks are reported to be instructing staff not to lend more than 80 per cent of the purchase price, although they are considering cases on their individual merits.

For those wanting to get a foot on the residential property ladder in Auckland, where the median house price is $433,000, this has doubled to $86,600 - the amount of money they need to have in hand before they can buy.

From NZ Herald - to read full article click here.

Posted: 30 Nov 2008

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