Tighter mortgage lending rules proposed in New Zealand
Central bank looks to crack down on investor lending with high loan-to-value ratios
The Reserve Bank of New Zealand (RBNZ) proposed tighter restrictions on residential mortgage lending today (July 19), with governor Graeme Wheeler warning the risk of a "sharp correction" in house prices was still increasing.
Under the proposals, the existing three ‘speed limits' on lending would be reduced to two: one aimed at owner-occupiers and the other for investors. Both would be country-wide.
Banks could only extend 10% of their loans to owner-occupiers at a loan-to-value ratio (LVR)
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