The decision comes a week after the bank launched its single home loan rate card
Last week, ASB combined its two fixed home loan rate cards into one to “put thousands of dollars back into the pockets of first-home buyers” with mortgages over 80% loan-to-value ratio (LVR). And it seems ASB is not yet done with making life easier for its customers as it eases its lending servicing criteria.
ASB slashed its servicing test rate from 7% to 6.45% for all borrowers even if they have a deposit of less than 20%, according to TMM Online.
An adviser confirmed that the changes give clients a net gain in servicing of around $400 to $500 per month or $60,000 per $1,000,000.
“The key thing is that people can now borrow more. It's a good sign after the bank was so cautious coming out of the COVID lockdown,” the adviser told TMM Online.
Hamish Patel, a mortgage broker at Mortgages Online, added that the bank's decision to ease its servicing criteria “should make a material difference [and] help [it] frame a clearer picture in regards to the lower rate environment.”
“It could be interesting to see if other banks follow suit. My personal feeling is lending is about to ramp up if other banks start being as confident as ASB,” he told TMM Online.
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Meanwhile, ASB's recently launched single home loan rate card allows all customers to access lower rates no matter their levels of equity.
Craig Sims, the general manager for retail banking at ASB, said the single home loan rate card aims to help more Kiwis own a home.
“The homeownership journey is an incredibly exciting one, but we know it can also be stressful for many of our customers,” Sims said.
“The move to a single rate card is going to help make it simpler and easier. More importantly, however, this change is going to save our low equity first home buyers thousands of dollars each over the course of their home loan repayments, which will make a significant difference to their financial wellbeing.”
