Broader high-LVR access begins 1 December under the new DTI framework
The Reserve Bank (RBNZ) has confirmed it will ease loan-to-value ratio (LVR) restrictions from 1 December, increasing flexibility for both owner-occupiers and investors as debt-to-income (DTI) rules bed in.
DTIs allow 'less restrictive' LVR settings
RBNZ said last year’s introduction of DTI limits has reduced systemic housing risk, allowing softer LVR rules to operate as the new default.
“We have concluded that the introduction of debt-to-income (DTI) restrictions last year means LVR settings can be less restrictive on average,” RBNZ said in a media release. “This includes looser default settings that we expect will be in place most of the time, except for when risks are particularly elevated.”
Following consultation with banks, the easing will proceed as planned.
RBNZ emphasised that LVR limits act as ‘speed limits’ on low-deposit lending and apply only to new loans, not existing mortgages — with exemptions for refinancing, new builds, Kāinga Ora products and remediation loans.
What changes on 1 December
Two key settings will shift:
- Owner-occupiers: Up to 25% of new lending may exceed 80% LVR (previously 20%).
- Investors: Up to 10% of new lending may exceed 70% LVR (previously 5%).
Investor LVRs remain tighter due to higher risk profiles, but the increase gives lenders and advisers added flexibility for higher-LVR deals.
Ongoing monitoring under the new framework
RBNZ said it will continue closely tracking housing-related risks.
The new financial policy committee will review LVR settings at least annually and can tighten rules again if market risks rise.
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