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Investors may see biggest impact of Reserve Bank's lending limits (www.rnz.co.nz)

submitted 3 months ago by [email protected] to c/[email protected]

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The Reserve Bank says that from 1 July, banks will only be able to lend about 20 percent of their new lending to owner-occupier borrowers with a debt-to-income ratio of more than six. That means, if your household earns a combined $100,000, your loan will be limited to $600,000.

Banks will only be able to lend 20 percent of lending to investors with a DTI of more than seven.

The rules won't apply to Kainga Ora loans, new builds or refinances.

At the same time, the bank will loosen the loan-to-value ratio (LVR) restrictions so that banks can lend 20 percent of their lending to owner-occupiers with deposits of less than 20 percent, from 15 percent at the moment, and 5 percent of lending can be done to property investors with equity or deposits of less than 30 percent, compared to 35 percent at present,

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[–] [email protected] 10 points 3 months ago (2 children)

This is good!

They're finally regulating mortgages in terms of affordability.

Hopefully this will cool the investor market a little.

Stand by for the government to pass some bullshit under urgency to heat it back up again.

[–] [email protected] 5 points 3 months ago

Yeah that's what interests me, given the funding they've raked in from property related interests over the last couple of years they are quite beholden to that lobby.

[–] [email protected] 3 points 3 months ago

Yes it seems like a good move on behalf of the RBNZ. Interest rates are likely to head down from here on out, and that means people can borrow more on the same income. Adding a cap before it starts to happen is a good plan.