Tamsyn Parker

Tamsyn Parker is the NZ Herald Assistant Business Editor

Rogue Kiwibank mortgage manager reined in

Kiwibank has had to rein in one of its mobile mortgage managers after they told a potential customer the bank had "no capacity" to lend money on low deposit house purchases from October 1 and a loan pre-approval would be withdrawn the borrower could come up with a 20 per cent deposit.

From October 1 banks have to cap new lending to people with less than a 20 per cent deposit at 10 per cent to meet new Reserve Bank rules.

This week ASB Bank pulled the plug on its pre-approvals for low deposit lending from October 4 giving its potential customers until next Thursday to buy a house.

A would be homebuyer who contacted the Herald said his Kiwibank mortgage manager had also told him that a pre-approval would be withdrawn from October 1 unless he could come up with a 20 per cent deposit.

In an email the mortgage manager told the homebuyer they would need to buy a property by September 24 and have documents to their solicitor by September 30 to meet new guidelines.

"Should this not be achieved then out Pre-approval from 1 October 2013 is withdrawn based on the Reserve Bank ruling unless you are able to come up with a 20 per cent deposit."

The email was sent on September 13.

The mortgage manager also said that they had been advised from October 1 that "we have no capacity to lend for low deposit purchases until the Reserve Bank tell us what to do next."

But a Kiwibank spokesman said its mortgage manager had provided the wrong information.

"Regrettably in this instance the customer has been provided with incorrect information, and we will be following up with the staff member concerned to ensure this does not happen in future and that an accurate communication of Kiwibank's position is provided."

The spokesman said Kiwibank would continue to approve some low equity home loans from October 1 and would be prioritising first home buyers.

"Currently we do not have any plans to set a time limit for pre-approvals."

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