In a speech today the RBNZ Governor announced that from October 1st no more than 10% of new mortgage lending can be at a loan-to-value ratio in excess of 80%. The announcement follows last week’s finalisation of the banking supervision documents setting up the mechanism for such a restriction. Last week’s policy details mean banks will be measured on their adherence to the policy on a 3-month moving average basis. Given the pipeline of pre-approvals banks already have, the RBNZ has introduced a probationary period of six months over which the average rate of high LVR lending will initially be calculated over.
Read the full report: Market Research
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