Kiwibank says it will give priority to first-home buyers with small deposits, over investors in the same position.
By Susan Edmunds
Reserve Bank governor Graeme Wheeler announced today that from October 1, banks will only be able to have 10% of their lending to borrowers with equity of less than 20%.
Chief executive Paul Brock said it was still working through the implications of that. But he said owner-occupiers would be given preference.
“When it comes to lending with deposits of less than 20 per cent, we will give priority to first-home buyers over those who are buying investment properties.”
He said the bank was committed to helping buyers get into their first homes.
“We strongly believe that the critical issue when assessing a loan application is the ability to service the debt rather than the amount of equity a person has in the loan. Equity can be built over time and we do not want to push people out of purchasing a family home while they wait years and years to save a much bigger deposit. However to do this we will have to set priorities for our lending and first home buyers come first."