Wide variation in stress testing thresholds
New comparative data from Mike Pero Mortgages shows that differences in the stress test thresholds applied by lenders could affect an applicant’s borrowing power by as much as $160,000.
Mike Pero Mortgages CEO Mark Collins says each bank has a different appetite for risk, so what they are seeing is lenders stress testing anywhere from 7% right up to 8.5%.
This means there are big variations in how much both bank and non-bank lenders are willing to lend Kiwi home buyers – and that applies to buyers outside the main city centres too, he says.
“While our numbers may relate more to a buyer in a major city like Auckland, there’s going to be a significant variance in how much each lender will allow you to borrow for any property price.”
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