The bank had previously stuck to tight internal limits, despite the relaxation of loan-to-value restrictions in May.
The lender says it will now allow owner-occupiers to borrow up to 90% LVR, and owner-occupiers with construction properties to borrow up to 85% LVR.
Lending with LVRs greater than 85% LVR requires a minimum uncommitted monthly income of $900, it said.
Investors can borrow up to 80% LVR , including construction lending. Brokers say ASB and Kiwibank are the most receptive to investor loans in the current market.
Advisers have welcomed ASB's decision to loosen credit policy as the environment remains tight following the Covid-19 outbreak.
One broker told TMM Online: "This is great news and we hope to see more of this as time goes by. It would also be good if they opened up the policy on up to 90% LVR with an investment, probably in the future."
In an email to advisers earlier this month, ASB said its credit policy changes "apply to all new applications or in the event that a current approval needs to be extended".
Advisers will test ASB's appetite for new-to-bank borrowers looking for plus 80% LVR loans. Westpac halted lending to new borrowers above 80%, informing advisers of its decision last week.
ASB unveiled a series of mortgage rate cuts this morning.
The bank's one-year special rate falls to 2.69%, three-year special falls to 2.99%, four year special drops to 3.09%, while its five year special rate is cut to 3.19%.
