10 Jun 2016

BNZ to also restrict lending to foreign buyers

2:47 pm on 10 June 2016

BNZ has joined Westpac and ANZ in placing restrictions on lending money to foreigners buying New Zealand properties.

From Friday, BNZ is stopping lending to non-resident borrowers with overseas income because of current housing market conditions.

The bank will also require New Zealand citizens and permanent residents with overseas incomes to have at least a 40 percent deposit when buying a home.

Those people will also have a 40 percent shade applied to the value of their income earned overseas, when calculating their ability to service the loan.

That means if a customer is a New Zealand or Australian citizen who is living overseas and earning income overseas, only 60 percent of that income will be taken into account when BNZ is considering their ability to service a new home loan.

In a statement it said: "As part of being a prudent lender, BNZ is constantly reviewing and adapting our lending criteria to reflect current conditions, and as a result we are changing our policy on how we recognise foreign income for lending."

On Thursday Westpac said it was no longer lending money to foreigners wanting to buy residential property, and ANZ is now only lending to overseas buyers if they are individuals and intend on living in the homes they buy.