Regulatory Alerts2022-05-17
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Consultation Paper: Modifications to framework for restrictions on high-LVR residential mortgage lending
The Reserve Bank of New Zealand proposes modifications to its Loan to Value Ratio (LVR) restrictions framework, including an exemption for residential construction lending to prevent a significant reduction in new housing supply. The regulator also seeks to close avoidance channels by strengthening anti-avoidance provisions and introducing deposit identification requirements, ensuring that non-mortgage credit does not facilitate circumvention of LVR limits. These changes aim to balance financial stability with the need to support housing supply and ensure prudent lending standards.
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