Are you thinking about buying your first home or investment property? Well, you could be in a stronger position to purchase because the Reverse Bank of New Zealand (RBNZ) has proposed easing Loan-to-Value Ratio (LVR) restrictions. And, as your trusted mortgage broker, O’Hagans, we’re here to help break down what this could mean for you.

RBNZ has proposed lifting the limit on loans for owner-occupiers with LVR above 80%, from 10% to 15%, from June 1. The proposal will also enable banks to make 5% of total new investor loans to those with LVRs above 65%, up from the current 60%.

Basically, the RBNZ wants to make it easier for you to get into the property market by allowing more borrowers to have a smaller deposit. This is great news for first-home buyers and investors who may not have a huge chunk of change sitting in their bank account.

But let’s be real, buying a property is a big commitment, whether it’s your first home or your fifth! It’s like getting married but instead of “till death do us part” it’s “till the mortgage is paid off.” So, before you start running to the nearest open home, let’s look at both the pros and cons.

The pros? Well, with smaller deposit requirements, you might be able to afford a better property or location than you initially thought. Also, you can start building equity in your property earlier on.

Now, for the cons. A surge in demand could lead to further price increases, which means you might end up paying more for a property in the long run. And, let’s not forget about those pesky interest rates. They can fluctuate and affect your mortgage repayments in the short and long term.

But don’t worry, we’ve got your back! At O’Hagans, our team of advisors will help you navigate the ever-changing property market and the ever-changing world of RBNZ policy to help you find the best solution that fits your needs. We’re here to support you to ensure that the confusing paperwork and bank jargon doesn’t become overwhelming!

So, if you’re ready to take the plunge into the property market, give us a call on 07 308 9910. And who knows, if these proposed changes become actual policy, you might be able to afford that property you’ve been dreaming about!

To read more about the proposed changes to the LVR restrictions click here

This post was written by

Simone Hojabri - who has written 5 posts