Regulatory Alerts2022-05-17
Framework for Restrictions on High-LVR Residential Mortgage Lending
The Reserve Bank of New Zealand issued 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 with specific measurement periods and anti-avoidance provisions to prevent circumvention. It defines qualifying lending amounts, outlines exemption categories, and establishes guidelines for calculating loan-to-valuation ratios to ensure consistent regulatory reporting and compliance.
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