The RBNZ is consulting until 7th April 2015 on a potential new sub asset class for property investor loans. The Bank wants to further classify property investor loans, so it can ensure banks are holding adequate capital for investment property lending.
In a market downturn losses associated with mortgage defaults are higher for investment properties than owner occupiers. By further classifying investor property lending the Bank can in future target specific groups of investment property lending in its macro prudential policies.
Banks will need to revise their systems for the new specific asset sub class and alter their rules accordingly so measures can be taken to ensure there is adequate capital against investment property lending.
Kris Pedersen Mortgages specialise in investment property loans. Kris Pedersen says the 5+ Property Rule was meant to come in last year but it’s been delayed. Even if the 5+ rule doesn’t come in or is watered back in some way be aware that the RBNZ is not going to want the property market to continue to get out of control so there is definitely the possibility for further rules to be introduced this year potentially making finance harder to source.
Right now interest rates are low and property values and sales are strong. To find out how your own investment lending stacks up contact Kris Pedersen.
This blog article was written for PropertyBlogs by Mobilize Mail.