The Reserve Bank announced this morning it will be making it easier in the new year for homebuyers to get loans with deposits of less than 20 per cent.
“Both mortgage credit growth and house price inflation have eased to more sustainable rates, reducing the riskiness of banks’ new housing lending,” Reserve Bank officials said in a statement. “In response, we are easing our loan-to-value ratio (LVR) restrictions on banks’ new mortgage loans.
“If banks’ lending standards are maintained we expect to further ease LVR restrictions over the next few years.”
Currently, banks are only allowed to grant 15 per cent of their new mortgage loans to buyers who have a deposit of less than 20 per cent.
Starting January 1, the bank will be able to devote up to 20 per cent of such loans to those with deposits of less than 20 per cent.
Also, up to five per cent of new mortgage loans to property investors can have deposits of less than 30 per cent (lowered from 35 per cent).
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