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the bank had "no capacity" to lend money on low deposit house purchases from October 1 and a loan pre-approval would be withdrawn the borrower could come up with a 20 per cent deposit.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be homebuyer who contacted the Herald said his Kiwibank mortgage manager had also told him that a pre-approval would be withdrawn from October 1 unless he could come up with a 20 per cent deposit.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.