An LVR is how much you borrow, compared to the value of the thing you’re buying. It’s expressed as a percentage. So, if you’re buying an apartment worth $500k and you have a $50k deposit, your LVR is $450,000 ÷ $500,000 or 90%. A lower LVR means less risk to the bank and that’s why, in 2013 when the housing market was peaking, the RBNZ tightened the LVR for lenders.
Since mortgage and house price growth are now slowing, the risk of lending is smaller. So the boa constrictor on LVRs is being loosened to more of a bow tie. From 1 January 2019 Guvna Orr’s new rules will apply:
If banks do as they’re asked and, our economy purrs along, the RBNZ might ease LVR restrictions even more. Exciting times for new borrowers…
If you need help to better understand how this impacts you, or how I can help you into a competitive loan, get in touch.
The Real Estate Institute of NZ (REINZ) released its September monthly property report last Tuesday 15th October. Auckland’s median price increased for the first time in 11 months – up by 3.7% compared to August 2019. However, the increase when compared to September 2018 is only 0.2%, returning to around … Read more
The figures below include all sales by all agencies for the suburbs of Bucklands Beach, Eastern Beach, Half Moon Bay, Howick, Cockle Bay, Shelly Park, Highland Park, Farm Cove, Sunnyhills, Pakuranga, Edgewater, Botany Downs, Northpark, Dannemora, East Tamaki, Flat Bush, Whitford, Beachlands and Maraetai. The full report is available here. … Read more