Regulatory Alerts2022-05-17
Regulatory Impact Assessment: Restrictions on High-LVR Residential Mortgage Lending
The Reserve Bank of New Zealand proposes restrictions on high loan-to-value ratio residential mortgage lending to mitigate systemic financial risks arising from rapidly rising house prices and household indebtedness. Registered banks will be required to limit new lending above 80 percent LVR to 10 percent of their total new residential mortgage volume. This macro-prudential measure aims to dampen excessive credit and asset price growth to promote long-term financial stability and prevent a disorderly market correction.
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