Regulatory Alerts2022-05-17
Framework for Restrictions on High-LVR Residential Mortgage Lending
The Reserve Bank of New Zealand issues this framework to impose quantitative restrictions on the share of high loan-to-valuation ratio residential mortgage lending by registered banks to maintain financial stability. The policy applies to all New Zealand registered banks, utilizing standard conditions of registration that limit high-LVR loans over rolling three or six-month periods based on lending volume. It includes detailed anti-avoidance provisions to prevent banks from circumventing restrictions through complex arrangements and defines specific measurement periods and exempt categories for compliance.
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