RBNZ to tighten loan limits as house prices continue to rise

Tougher loan-to-value limits could be followed by rate floors or debt service limits

Small toy houses

The Reserve Bank of New Zealand is preparing to implement stricter curbs on mortgage lending as house prices continue to climb from “already elevated” levels.

In a statement today (August 3), deputy governor Geoff Bascand said despite existing limits on loan-to-value ratios (LVRs), “we haven’t seen a sufficient reduction in risky lending”.

The existing rules limit banks’ lending at LVRs higher than 80% to no more than 20% of new loans. In a consultation due later this month, the central bank

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