This from the Herald
The credit crisis that started half a world away is hitting renovators and first-home buyers.
A combination of falling house prices, rising living costs and higher prices for overseas money is forcing banks to tighten their lending policies.
Worst affected will be those borrowing a high proportion of their home's value. But all borrowers now face tougher tests to prove they can pay back a loan.
ASB drastically tightened its lending rules this week, telling brokers that it would generally not lend more than 80 per cent of a home's value.
Its head of retail banking, Ian Park, said ASB would consider applications for more than 80 per cent, "but they will have to be very strong from a servicing perspective".
A year ago, all main banks would lend up to 100 per cent of a home's value.
When house prices were rising and the economy was strong, up to 40 per cent of first-home buyers were getting 100 per cent loans, brokers say.
Massey University banking expert David Tripe said consumer credit had been tightened as banks took a less rosy view of borrowers' prospects.
ASB has also stopped giving "low doc" loans - the credit once advanced to high-earning business people who did not have all the documents to prove their income.
In March, Westpac changed its lending policy to require faster repayment of mortgages that had a high ratio of debt to value.
ANZ and National changed their rules early this year to make it more likely that anyone seeking more than 80 per cent of a home's value would be asked for a registered valuation.