LVR tweaks substantive for owner-occupiers
Investors will be able to buy additional houses with a 35% deposit instead of 40%. For owner-occupiers, banks will be able to use 15% of their new lending for clients who have a deposit of more than 80%. The existing rule is 10% of new lending.
ANZ chief economist Sharon Zollner says the change for investors is not likely to make a huge difference, as it is difficult to make the maths work on a highly leveraged property investment given the change to interest deductibility rules, and that the tweak is small.
However, the difference for owner occupiers is more substantive because it’s not a fixed amount of lending; it’s a proportion of a total that can go up and down, and growth in mortgage borrowing and house sales may be close to bottoming. “That 15% could represent a higher percentage of a higher number,” Zollner says.
Similarly, while the number of borrowers is still lower than a year ago, the rate of decline is dropping, and could tick positive before long, she says.
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