The BNZ Broker Hub is only accepting new-to-bank deals for owner occupiers up to 80% LVR, and investors up to 60%, according to a memo sent out to advisers last week.
Owner-occupied deals over 80% LVR will not be accepted unless they are existing BNZ customers, according to the broker update. The same goes for investors above 60% LVR.
New-to-bank customers will not be eligible for housing under construction (HUC) deals, according to the note.
While all applications over 90% LVR will be rejected, regardless of whether the customer is an existing client or not.
The limits come as the big four bank attempts to reduce turnaround times and clear a backlog of applications.
The volume of deals since the pandemic, and lack of staff to process deals, have hindered turnaround times across the banking sector.
BNZ has notified brokers of a turnaround time of 10 working days from the date it has "received all the information we need to make a credit decision".
"BNZ's existing customers are taking priority, followed by low risk deals," one adviser said.
According to advisers, the strict limits have been put in place to speed up turnaround times, and do not mark a permanent change in the bank's risk appetite for specific deals.
"They are just snowed under and slow, slow, slow. So they are trying to reduce the inflow more than anything I think," an adviser commented.
BNZ said the broker application settings were changed earlier this year amid "unprecedented demand", to help it prioritise existing customers, owner-occupiers, and first home buyers.
A spokesman said: "This policy is continually being reviewed. Last week we made a change to allow existing BNZ investor exemption applications, and we’ll continue to monitor and review it as market conditions change."