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Kiwibank already near target before rules kicked in

Kiwibank’s low-equity loan growth in the September quarter is in line with what would be expected of lenders preparing for new loan-to-value restrictions, a banking expert says.

Tuesday, November 26th 2013, 1:35AM 1 Comment

by Susan Edmunds

Its latest GDS shows that the percentage of its net home loan growth in mortgages with an LVR of more than 80% was 15% for the quarter.

The bank recorded mortgage growth of $234 million in the three months ended September, of which $34 million was to borrowers with a deposit of less than 20%. It takes Kiwibank’s total high-LVR lending to 18.77% of its loan book, slightly down on the previous quarter.

Under the restrictions that kicked in at the beginning of October, the bank can only lend 10% of its new loans to borrowers in that category.

Massey University banking expert Claire Matthews said she was not surprised by the result. “With the knowledge that the LVR regulations were coming, the banks had to move earlier to ensure they were ready for them. They can’t risk non-adherence.”

Kiwibank may be able to continue to lend slightly more high-LVR loans than some other lenders because it offers Welcome Home Loans, which are exempt from the cap.

Matthews said she expected all the banks that had access to the loans to start doing more. Westpac and TSB also offer them. The limits on who qualifies for the Government-backed mortgages have been extended.

But she said it would come down to where customers decided to take their business. “I’m not aware of there now being any restriction on volume as there was in the past – at the very least the previous limit has been significantly extended. Kiwibank would only be doing more if they attracted more of those type of customers.”

Kiwibank did not respond to a request for comment.

« Kiwibank goes mobile with home loan applicationsRESIMAC takes full control of home loan book »

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Comments from our readers

On 26 November 2013 at 12:40 pm Glenn said:
Let's not forget good old SBS Bank offering the Welcome Home Loan, as they have quite competitive interest rates in comparison to the other banks who offer the WHL.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 ▼6.39 ▼6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.17 5.79 5.69

Last updated: 30 October 2024 9:36am

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