As of 1st October 2013, the Reserve Bank has imposed limits on high loan-to-value mortgage lending.
What are the new rules?
Under these new rules, only 10% of a bank’s new residential mortgage lending can be at LVRs over 80%. Up until now, high LVR lending has been at around 30%.
Why have they been implemented?
The Reserve Bank has implemented these measures because of concerns that the housing market is threatening New Zealand’s financial stability.
Half of bank lending in NZ is for housing, and for most people their home is by far their biggest asset.