Breaking News: Reserve Bank – New Rules for Investors

Share This Post

Latest Reserve Bank Announcement!

The RBNZ has this morning put a 40% restriction on the banks in regards to investment lending.

Note that while this effectively is not in place until September this year, I am expecting the banks to action it immediately in most cases, which basically means that if you are not preapproved at least, it is extremely unlikely that you will get this sort of lending above a 60% Loan to Value Ratio (LVR).

reserve-bank-new-rules-for-investors-release

Key points:

  • New builds are exempt.
  • If you have a preapproval and are wanting to get into the investment market and do not have the ability to come up with a 40% deposit then you need to try and find something suitable quickly as you will not be able to get your preapproval rolled over.
  • If you have 2 properties with the same lender and are looking to sell one, note that there is a strong chance that the bank will require the LVR against the remaining property to be kept at 60% LVR, meaning that they may take more of the sales proceeds than what you are expecting.
  • If you are selling get your Solicitor to request what discharge amount will be required. As always this is a valid reason why we recommend split banking. If you are not sure what this is exactly contact Matt Willoughby Now or hold out for this Month’s regular post.

Non Bank Lenders

I have access to smaller Lenders who will become much more useful off the back of this announcement as they don’t have to abide by these same restrictions and can continue to do 80% Loans e.g 20% Deposit funding across the country including Auckland. Yes you heard that right!

Note that they are actually very reasonably priced. Here is an example of some rates as of today at an 80% LVR Loan Approved:

Floating – 5.34%

Fixed 1 year – 4.95%

Fixed 2 year – 4.99%

Fixed 3 year – 5.05%

Fixed 4 year – 5.16%

Fixed 5 year – 5.27%

On the flipside I’ve seen a number of investors manage to get some really good deals straight after the implementation of previous restrictions, as these tend to make most people procrastinate for a period of time, so if you are looking to add to your portfolio keep an eye out.

See what our clients have to say

4.9
Based on 49 reviews
powered by
Review Us

More Articles To Explore

Load More

Discover More

Categories
Recent Posts

Subscribe To Our Newsletter

Get updates and learn from the best

►
Necessary cookies enable essential site features like secure log-ins and consent preference adjustments. They do not store personal data.
None
►
Functional cookies support features like content sharing on social media, collecting feedback, and enabling third-party tools.
None
►
Analytical cookies track visitor interactions, providing insights on metrics like visitor count, bounce rate, and traffic sources.
None
►
Advertisement cookies deliver personalized ads based on your previous visits and analyze the effectiveness of ad campaigns.
None