The Reserve Bank last year made changes which require all banks to hold more capital for property investment loans than they do for owner-occupied properties.
No banks have yet made changes to investment loans but Westpac has written to mortgage advisors advising that it is likely to start doing so.
It says: “The changes by the RBNZ in November 2015 mean that all banks need to hold more capital against investment loans. This makes investor property lending more expensive for banks.”
“The changes we are making reflect this cost.”
Westpac refused to provide more information about these changes or grant an interview.
It went on to say in its email: “We will continue to remain competitive for those clients purchasing or refixing an investment property [loan].”
Mortgage advisors report Westpac is the major bank which tends to be in and out of the market. This was raised last year in feedback to the bank, which said it would make changes.
However, since then Westpac has been through a major restructure which reduced its staffing levels.
Advisors report that BNZ is the most competitive on pricing in the market, especially as it has re-entered the mortgage advisor space after a 12-year absence.
It currently uses mortgage advisors working with NZ Financial Services Group, which includes Loan Market, and it has recently started accrediting Mortgage Express advisors.