Regulatory Alerts2022-02-27
Reserve Bank of New Zealand Draft Framework for Restrictions on High Debt-To-Income Residential Mortgage Lending
The Reserve Bank of New Zealand issued a draft framework to impose debt-to-income (DTI) restrictions on registered banks to mitigate systemic risks to financial stability. The policy requires banks to limit the share of new high-DTI residential mortgage lending over rolling three or six-month periods, with specific exemptions for refinancing, property transfers, and construction. The document also establishes anti-avoidance measures and defines the calculation methods for debt and income ratios to ensure consistent regulatory reporting.
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