Bank drops apartment minimum deposit threshold

One of the major banks has dropped its minimum deposit thresholds for apartments.

The move by Westpac comes into effect today and will help more struggling house hunters into their first home.

Today's announcement by Westpac was foreshadowed by the Weekend Herald last month.

It will allow some buyers to purchase apartments worth at least $355,000 with just a 15 per cent deposit - down from the current 20 per cent minimum - provided the property is bigger than 50sq m.

Other banks are expected to follow suit, throwing a lifeline to the city's beleaguered first home hunters who are fast being priced out of the market because of surging house price inflation and cut-throat competition.

Westpac says it is rolling out the new policy from this week. It means someone purchasing a $500,000 inner-city or city-fringe apartment could potentially secure finance with $75,000 deposit - down from the current $100,000 minimum.

The policy is expected to be aimed at first home buyers rather than investors and will only apply to owner-occupier apartments.

Kiwibank has also confirmed it is reviewing its apartment lending criteria in a move designed to help customers into home ownership.

"This review is well underway, however we are not yet in a position to provide any detailed information," a spokesman told the Herald.