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Borrowing - is it suddenly getting easier?


As we head towards another Christmas and New Year period, many of us will be thinking about our ongoing goals and this is just the time to do that!

As part of this thought process we may be reviewing our home equity and whether we can do better. But if we decide we need to borrow, is it going to be any easier?

Well as some clever commentator once quipped "the bank will surely lend us money if we can prove that we don't need it in the first place"

Funny as that might sound, many commentators have rightly quipped recently that the lenders have money to lend but are somewhat constrained by the caution contained in the Responsible Lending Code. One could almost surmise that there is plenty of money to be lent but the greater emphasis on lender caution is making lending difficult.

In many ways the lending "slowdown" may have contributed to the lower interest rates as lenders are now having to compete harder for borrowers.

And so what is changing in the New Year 2019?

Well from 1 January 2019 the Reserve Bank will allow the banks to do more lending to home buyers with less than a 20% deposit. At the same time those looking to utilize equity in their home to purchase a rental property, will need a 30% equity in the rental property rather than the 35% equity required currently, or the 40% required before that.

So, now is a good time to speak to us and see if the new rules will make it easier for you in the New Year!

Call us on (03) 281 8605 or email

jerome@thompsonmcneill.co.nz

sandra@thompsonmcneill.co.nz


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