RBNZ will allow the big four banks to lend more to owner-occupiers with smaller deposits, declaring a lower risk of further large price falls.
RBNZ will increase the limit on loans to borrowers with an LVR above 80 per cent from 10 per cent to 15 per cent of total new bank lending to owner-occupiers.
The Reserve Bank of New Zealand will ease rules limiting new lending to home loan borrowers with small deposits, after the steep fall in property prices across the Tasman. But in the year following the November 2021 peak, and after the lending rules came into effect, the NZ property market fell 12.4 per cent to October 2022, according to the REINZ House Price Index.
The RBNZ will increase the limit on loans to borrowers with an LVR above 80 per cent from 10 per cent to 15 per cent of total new bank lending to owner-occupiers. The moves augur well for major bank lending growth in New Zealand, which will be in focus when the major banks, also the largest mortgage lenders in NZ, start reporting interim profits later next week. ANZ is the largest bank in New Zealand; in the year to September 2022, it increased its mortgage book by almost 4 per cent to $NZ140 billion .
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