More relief may soon be on the way for struggling mortgage holders with the Reserve Bank considering extending home loan repayment holidays while some trying to get on the housing ladder are struggling to get a loan.
Chris Nolan-Downs had a deposit paid, a KiwiBuild home selected, and construction well underway.
“Pre-Covid everything looked great,” Mr Nolan-Downs said.
Now that could be derailed for Matt and Chris, who are facing repeated rejections by banks for a home loan.
“One wants a 30 per cent deposit, the other has a requirement that there's no foreign income, another has it that you have to be in a job in two years, or they won't accept contractors, it just seems to be that every bank has a different set of rules,” Mr Nolan-Downs said.
Mr Nolan-Downs says “servicing the payments is not a problem”.
“We can understand why they are being cautious but on the flipside we have had a lot of stable things and overall it's going to cost us less to be in our own home,” he said.
With settlement in October, every day without bank approval takes this couple further from their dream home.
That is despite the removal of the high-risk LVR restrictions a few months ago.
“I think it's just in everyone’s interest to have decent high-quality standards around lending,” Kelvin Davidson of Corelogic says.
In April, when we were in lockdown banks lent just $2.8 billion in home loans, but in June, banks handed out nearly $5.4 billion.
That's almost the same compared to that time last year, with $651 million of that at more than 80 per cent of the value, while $460 million went to first home buyers.
“Money's getting out their door - there's money to lend, it's still not easy to get, you've still got to have the required deposit, prove your job security as well as meet pretty strict serviceability tests,” Mr Davidson said.
Despite the number of people requesting mortgage help steadily declining since March, Finance Minister Grant Robertson is still open to the idea of banks extending mortgage repayment holidays.
“But there are enough that it is an idea that's worth considering,” Mr Robertson said.
Mortgage holidays are due to end soon with the Reserve Bank expected to ask retail banks to extend those, and with the wage subsidy also due to end in September, that could be another lifeline.
A decision on that could be expected in coming days or weeks, the Reserve Bank says.
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