ANZ suspends low deposit home loans

ANZ Bank has put pressure on low deposit loans to homeowners wishing to buy existing homes as it prepares to comply with the Reserve Bank’s stricter lending rules.

The country’s largest lender today said it was “temporarily” suspending such loans after loan-to-value ratios (LVRs) were tightened in early November, imposing a limit of 10% of total new loans by a year. bank to owner-occupiers with a rate of less than 20%. to pay.

ANZ chief executive for personal banking, Ben Kelleher, said the bank was barely going over the limit, but once it had some leeway it would pick up.

“We’re not that far away, so it’s just a temporary brake pump and we’re hoping to be able to open after Christmas once we’re below that limit.”

He said the loan stop would affect about 10% of his customers, but not all existing approvals and pre-approvals would be affected, as would low security deposits to builders of new homes.

Kelleher said there were signs of a slowdown in the housing market, with a long list of factors ranging from rising interest rates, tighter lending criteria, affordability and restrictive tax rules.

“The list goes on, there are a lot of headwinds for the real estate market.”

“I don’t see a big crash coming, but I think we’re going to go back to low-digit growth for a while, which would be a really good thing,” Kelleher said.

He said last year’s record mortgage rates, which fueled the home buying boom, are now a thing of the past and won’t be repeated anytime soon.

“These were abnormal rates at a very unusual time and with rising inflation, open borders, wholesale rates are going up in expectations and that’s driving fixed mortgage rates up.”

Meanwhile, the Reserve Bank released more details and asked for comment on its debt-to-income ratios, which would limit lending to a borrower’s income.

He also wanted comments on interest rate lows for banks to test whether borrowers can cope with rising interest rates.

“We are not proposing to implement any restrictions on debt service at this time, but we want to prepare to implement them in case financial stability risks warrant,” said Vice Governor Geoff. Bascand.

The central bank has been considering DTIs for a few years as a way to control risky bank lending, but would still need government approval.

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