ASB will "generally" expect home owners to have a deposit of
20 percent when seeking a mortgage on a house.
ASB said it will still lend to some people with less equity
if they have "very strong serviceability".
The bank has tightened its criteria for home loans in a
number of ways.
"As a rule of thumb someone with 20 percent equity would
generally fit where we would want to be," said Ian Park, the
bank's head of retail banking.
He said the bank was being more thorough in assessing living
costs borrowers face when it assesses the ability of a
mortgage applicant to service the mortgage.
"We are being more realistic with the cost increases that
people have had to face in the last 12 months when we look at
serviceability of their borrowing," he said.
The bank would also no longer be involved in so called "low
doc" loans, which was a tiny part of its business.
These are mortgages where borrowers do not provide
independent proof of income but sign a certificate saying
what their income is. They are loans made mostly to
self-employed people.
"We are saying because we do so few of these, and the way the
economy is it is pretty difficult to assess what earnings
are, we will now treat it as a normal loan application and
get a bit more information on income," he said.
There has been speculation that banks will call on people to
have more equity in their properties.
Mr Park said the key thing was for people to keep paying
their mortgage and talk to their lender early if they were
having problems meeting payments.
He had never heard of a bank requiring more equity in an
existing unbroken contract.
