LVRs Relaxing - Including for investors!

[Anthonyacat]

I genuinely wasn't expecting any change to the Investor LVR restrictions, but they're dropping required deposits from 40% to 35%, as well as making more significant changes for the FHBs, with greater allowance for over-80% loans.

https://www.rbnz.govt.nz/news/2017/11/reserve-bank-to-ease-lvr-restrictions

I was expecting 15% LVRs for owner occupied, and no change to investors. Good news, we think? Heading in the right direction.

[Keys]

Pffttt!

5%

(mamc)

[Frezzinghot]

Why not go for broke and go to 30%. What is 5% going to do!

[Nick G]

i think the point is to avoid going for broke

5% for me frees up enough RC to fund 2 large renos on existing properties this year.

[Frezzinghot]

Fair point, I was thinking in regards to B&H. 10% would have been much better where I look.

FH

[Rosco]

Also the RBNZ LVR is only one part.

How banks react is the other! Banks might choose to keep borrowing how it is, to keep their risk low.

Ross

[Anthonyacat]

I can certainly agree with you on the "15% of loans can be over 80% for owner occupied". The banks aren't even coming close to their current 10% limit.

But with investors I'd be surprised if they keep people at 60%. My thoughts are they'll be happy to top up to 65% if your servicing is sufficient - but servicing is a bit of a problem given current 7-8% P&I assumptions!

[Keys]

5% for me frees up enough RC to fund 2 large renos on existing properties this year.

Jeeze, you work fast.

[Anthonyacat]

Impossibly fast, considering it doesn't come into effect until January!

[Nick G]