ANZ changes mortgage rules for small apartment lending

ANZ has today announced a change to deposits for freehold, standard apartments 38sq m or larger. Photo / Supplied

New Zealand's biggest residential lender is changing its rules on deposits for small apartments, slashing the amount that is needed for a deposit on a standard-size dwelling.

ANZ has announced it will be reducing the apartment size at which it will require customers to have a higher deposit.

It says the move is to help more customers onto the property ladder.

Under the new rules, customers will only need a 20 per cent deposit for freehold, standard apartments that are 38sq m or larger.

A standard apartment must have a bedroom separate from the living area.

Previously, any apartments smaller than 45sq m required a 50 per cent deposit.

"As New Zealand's largest lender, we want to do our bit to help people onto the property ladder," said ANZ NZ managing director personal Ben Kelleher.

"Apartments are often a more affordable entry point into the housing market. In addition, as cities intensify, apartments are becoming more common and popular choices for home buyers.

Kelleher said the bank still regarded lending for apartments as carrying more risk than for other property, meaning the bank required a higher deposit for apartments under the 38sq m threshold, and other non-standard apartments like leasehold or studio apartments.

The higher risks covered the ability for the property to maintain its value and increase over time, building defects, the quality of the body corporate, and leasehold tenure.

"However, it's important that homeownership is accessible to as many Kiwis as possible. So, we've changed our rules to unlock a wider range of apartments at lower deposits, as an affordable property option for more people," he said.