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RBNZ changes - 1 June 2023

After a bit of a rocky year for policy, with the CCCFA and lending restrictions providing challenges to banks and alternative lenders alike, we've finally had some reprieve with the RBNZ making some small changes to LVR (Loan to Value Ratio) limits on the 1st of June.

These changes were welcomed by the banks and customers alike, so let's break that down and what it means for you;

Good news for First Home Buyers with less than 20% deposit

From 1 June, banks are now allowed to lend up to 15% of their overall funds to borrowers with less than a 20% deposit, which has opened up options for those with a lower deposit who don't fit First Home Loan Criteria.

We've put together some more info about how these are different across on this blog and you can reach out to us if you've got questions around how this works.

Investors suddenly have more equity

With the changes, they're also allowed to lend up to 65% to investors purchasing existing property (or up to 65% LVR on existing portfolios) where this was previously 60%.

For many investors this is opening up lending options that just weren't there before, particularly if they have multiple properties in areas that have held value well, or if they're looking to purchase new build properties which still only need a 20% deposit.

What about my coffees and gym subscriptions?

Lastly, the CCCFA legislation has been reviewed and the recommendation was to make this a bit more practical for borrowers - expenses are now treated as discretionary or essential and banks have now pulled back on the tight requirements that have been in place for the past 18 months or so.

This means there is a bit more leeway if you've had a few months of over-indulging - but it's still important to set your budget and make sure your income and expenses line up if you're looking to borrow money.

We can make it easy

We're across all policy changes across the mainstream banks, and it's our job to make sure you've got plenty of options and the knowledge to make decisions about your next property purchase.

Our service is also free to you, as the banks pay us for bringing business to them. You get individualised and personalised advice for as long as you have a home loan, and we're stoked to be helping more people out there in our community.

Book in a call today and we'll have a chat and get you started!


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