Regulatory Alerts2022-05-17
Framework for Restrictions on High-LVR Residential Mortgage Lending
The Reserve Bank of New Zealand issues 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 mandates standard conditions of registration that limit the proportion of new high-LVR loans, prohibit additional security without agreement, and restrict second-ranking mortgages to prevent circumvention. Banks are required to report detailed LVR data to the Reserve Bank and publicly disclose their housing lending breakdowns by LVR category in quarterly statements.
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