RBNZ targets residential property investors with new high LVR restrictions
The Reserve Bank (RBNZ) is cracking down on bank lending to residential property investors, announcing it’ll reinstate tougher loan-to-value ratio (LVR) restrictions than were in place last year.
From May 1, at least 95% of new bank lending to residential property investors has to go to borrowers with deposits of at least 40%.
As an interim measure, from March 1 to April 30, the deposit requirement for at least 95% of new investor lending is being set at 30%.
From 1 March 2021:
LVR restrictions for owner-occupiers will be reinstated to a maximum of 20% of new lending at LVRs above 80%.
LVR restrictions for investors will be reinstated to a maximum of 5% of new lending at LVRs above 70%.
From 1 May 2021:
LVR restrictions for owner-occupiers will remain at a maximum of 20% of new lending at LVRs above 80%.
LVR restrictions for investors will be further raised to a maximum of 5% of new lending at LVRs above 60%.
A new build exemption where the borrower commits to the purchase at an early stage of construction or buys the residence (within six months of completion) from the developer;
Kāinga Ora’s First Home Loans scheme (formerly Welcome Home Loans), for low deposit borrowers to buy their first home; and,
Loans for remediation required to bring a residence up to new building codes, or to comply with new rental property standards (for example, installing insulation).
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