Regulatory Alerts2022-05-17
Reserve Bank of New Zealand Response to LVR Submissions September 2016
The Reserve Bank of New Zealand tightens Loan-to-Value Ratio restrictions for residential mortgages, imposing a 5 percent speed limit for investor lending above 60 percent LVR and a 10 percent limit for owner-occupiers above 80 percent LVR. The implementation date is delayed to October 1, 2016, to accommodate banks' pre-approval pipelines, while the scope of construction and remediation exemptions is broadened to support housing supply. The policy aims to enhance financial system resilience against severe housing downturns by dampening credit cycle amplification and reducing the risk of distressed sales.
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