Lack of available funding from NZ banks right now but don’t panic!
Though it’s not news that New Zealand has seen a decline in home lending in recent times, the last three months have been particularly difficult. The RBNZ (Reserve Bank of New Zealand) has put in place LVR restrictions that the banks must abide by. The bank is only able to lend to 10% of their portfolio [for whole market] to those who wish to buy owner-occupied property and have less than 20% deposit. If it’s for investment, however, the client will need to have a deposit of 40% with the banks only having a 5% cap available to lend outside of this rule.
With interest rates in the country at an all time low, deposit rates are low and less people are putting their money in the bank to avoid low returns. Quite simply, there is a lack of available capital to lend but people are queuing up to borrow, it’s never been harder to borrow in New Zealand.
What‘s the future looking like for consumers?
The borrowing has changed as a result; an application that would usually be sent to one bank, could now be to sent to several, with each bank having different available capital at different times.
Ironically, midst a lending drought, more people are seeking the service of an adviser to obtain funds.
A mortgage adviser has the experience of working with different lenders and the knowledge of which would provide the right outcome for each client to help maximise their borrowing ability and capacity.
Life is difficult for your clients that are looking to raise finance right now, as such our service has never been in greater demand, we do look forward to taking care of your clients’ needs.