ASB Bank increases deposit requirement from investors

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ASB Bank is taking further steps to help to address the rapid growth in home lending volumes.

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Photo: RNZ / DOM THOMAS

Chief executive Vittoria Shortt said effectively immediately, the deposit required from investors would increase from 30 percent to 40 percent.

“We are very focused on being a prudent and responsible lender,” Shortt said.

“We all have to play our part and this decision to immediately increase the deposit required from investors is about ensuring a balanced and sustainable housing market which is in the best interests of all New Zealanders.”

She said the bank was concerned that the continue high levels of investor demand were unsustainable.

Pre-approvals already in place would not be affected by the chance, which would apply to home loan applications and top-ups which have not yet been conditionally or fully approved, and rollover of existing conditionally or full approvals at expiry.

It is the second time in three months that the ASB has adjusted its loan-to-value restriction.

In November, the bank reinstated a 30 percent LVR restriction after the Reserve Bank indicated it was considering reintroducing LVR restrictions in March this year.

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