Regulatory Alerts2022-05-17
Consultation Paper on Adjustments to Restrictions on High-LVR Residential Mortgage Lending
The Reserve Bank of New Zealand proposes tightening loan-to-value ratio restrictions to address rising financial stability risks driven by surging house prices in Auckland. The draft policy introduces a 2 percent cap on high-LVR investor lending in Auckland while maintaining existing limits for owner-occupiers and increasing the national limit outside Auckland to 15 percent. These measures aim to reduce house price growth and enhance banking system resilience against potential market corrections.
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