Regulatory Alerts2022-05-17
Reserve Bank of New Zealand 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 to 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 structuring transactions to bypass limits and establishes specific definitions and reporting requirements for compliance.
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