Today the Reserve Bank has announced the removal of the LVR restrictions which have been in place since 2013.
The restrictions will be removed for 12 months.
Given that the Banks are likely to be very cautious with lending in the current unfolding environment whether or not the restrictions removal allows them to breath deep, square the shoulders up, and lend, remains to be seen.
The main banks are out with temporary mortgage relief packages in line with the 6 month “holiday” announced by the Government last week. This program is a JV between the RBNZ, retail Banks and the Government.
Options include taking interest only for 12 months ie: paying only the interest cost with no payments to reduce the amount of the loan.
Or a loan repayment deferral which involves no repayments at all for 6 months.
Make no mistake, this is no “Mortgage Holiday”.
Your loan amount will increase while your repayments are paused.
And the Lender will still charge interest on what you owe on your loan. This interest is added to your loan amount and they charge interest on that amount as normal.