ASB joins other main banks in limiting foreign borrowing

ASB has joined Westpac, BNZ and ANZ in making it tougher for overseas purchasers to get a home loan.

Monday, June 13th 2016, 5:20PM

The bank said it had reviewed its lending criteria and was making changes.

"ASB has reviewed its policies concerning the treatment of overseas income in home loan applications," a spokeswoman said.

"Overseas income will no longer be considered in applications where the customer does not hold New Zealand citizenship or permanent residency. Where a customer does hold New Zealand citizenship or permanent residency, we will consider overseas income on a case-by-case basis subject to certain conditions.

"We continue to consider applications from customers without New Zealand citizenship or permanent residency where overseas income does not form part of the application, subject to certain conditions," she said.

It comes after BNZ, ANZ and Westpac moved last week.

Westpac said it would no longer lend to non-resident borrowers with overseas income. Those with a temporary visa would be accepted only if they had an address and income in New Zealand.

The bank has also announced that its special home loan rates are no longer available to investors.

ANZ is following suit with restrictions on foreign buyers – they will only be able to borrow up to 70% of a property’s value and only to buy owner-occupied properties. They will not be able to get loans for bare land or construction and will not be able to take out any interest-only lending.

ANZ has also tightened its lending criteria to residential property investors by stopping lending for empty sections, and apartments off the off the plan.

BNZ joined them on Friday - saying it would not loan to people with foreign income who were not citizens or have permanent residency.

A maximum allowable loan to value ratio (LVR) of 60 per cent would also be required of New Zealand and Australian citizens and permanent residency holders who used foreign income to service a loan but did not reside in New Zealand.

Tags: ANZ ASB BNZ Westpac