It follows rules from the RBNZ that banks could not have more than 10% of their home mortgages advanced out to customers with a deposit of lower than 20%.
As loans work their way through the system, banks can creep closer to the Reserve Bank threshold, so they often block new high LVR loans until the pressure eases.
Westpac has now done this.
“We will be limiting the availability of new home loan pre-approvals for customers with less than a 20% deposit, to ensure we stay within the RBNZ LVR limits,” Westpac said.
“Existing pre-approvals and applications that have already been received will not be affected by the changes.”
In addition, the bank will approve new applications for existing Westpac customers seeking high LVR lending if they present a signed sales and purchase agreement when applying for finance.
This excludes unconditional sales agreements such as those made at auction. ASB and ANZ have taken similar steps.
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