Debt to Income Ratio
Key thing to be aware off here is that the central bank now has a cap on the most you could borrow. Six times for a home and seven times gross annual income for an investment. However the retail banks are allowed to bend this rule for 20% of their clients. Also there are certain exemptions, like refinancing, new builds. Keep in mind that currently(mid 2024) the banks are only lending about five times max, so this will have little impact initially. Expect this to have more of an impact when interest rates drop and banks have the appetite for more lending.
LVR
The Reserve Bank of New Zealand is also opening up the doors for more low deposit buyers – 20% of a banks new clients can have less than a 20% deposit. This may increase the number of first home buyers.
Also investors can buy with 30% deposit or equity, this is down from 35%. So a little quicker for those wanting to get to the next property.
CCCFA
The government has signaled a change here, with loosing of the requirements placed on lenders when assessing a application. This will mean quicker turnaround times we feel. Also may increase how much someone can borrow as lenders place less scrutiny on bank statements. However expect this change to take a little longer to have an impact as banks get their head around the new change in culture.
