Timeline for loan-to-value ratio restrictions

LVR restrictions eased from 1 December

For owner occupiers, the limit on the share of new lending allowed with an LVR above 80% will increase to 25% (up from 20%). For investors, the limit on the share of new lending allowed with an LVR above 70% will increase to 10% (up from 5%).

LVR restrictions eased further

From 1 July 2024, we eased LVR restrictions alongside the introduction of Debt-to-Income (DTI) restrictions, which also apply to banks’ residential mortgage lending.

The new LVR restrictions are a 20% limit for new loans with LVR above 80% (owner-occupiers) and 5% limit for new loans with LVR above 70% (investors).

LVR restrictions eased

From 1 June 2023, we eased LVR restrictions after a short consultation with the banking industry. Owner-occupiers changed from a 10% limit for loans with LVR above 80%, to a 15% limit for loans with LVR above 80%. Investors changed from a 5% limit for loans with LVR above 60%, to a 5% limit for loans with LVR above 65%.

The previous LVR settings were put in place November 2021 when risks were elevated. The restrictions built resilience in the financial system, which has been evident as house prices have fallen without widespread impacts to financial stability.

LVRs for owner-occupiers tightened

From 1 November 2021, LVR restrictions for owner-occupiers were further tightened to a maximum of 10% of new lending at LVRs above 80%.

LVRs for investors tightened

From 1 May 2021, LVR restrictions for investors were further tightened to a maximum of 5% of new lending at LVRs above 60%.

LVR restrictions reinstated to pre-COVID-19 levels

As of 1 March 2021, LVR restrictions were reinstated at the same level as before the onset of COVID-19 — a maximum of 20% of new lending at LVRs above 80% for owner-occupiers and a maximum of 5% of new lending at LVRs above 70% for investors.

Reinstating LVR restrictions consultation

From 8 December 2020 to 22 January 2021, we ran a public consultation on a proposal to reinstate LVR restrictions at the same level as before the onset of COVID-19.

LVR restrictions removed following the onset of COVID-19

We removed LVR restrictions for 12 months effective 1 May 2020 to ensure they did not have an undue impact on borrowers or lenders as part of the mortgage deferral scheme implemented in response to the COVID-19 pandemic.

LVR restrictions eased

We eased LVR restrictions at the start of 2019 after a short consultation with the banking industry. This resulted in minor revisions to the Banking Supervision Handbook effective 1 January 2019.

LVR restrictions eased

We eased LVR restrictions at the start of 2018 after a short consultation with industry. This resulted in minor revisions to the Banking Supervision Handbook.

Consultation responses published

We published a response to submissions on changes to the LVR restriction rules. The changes were reflected in minor revisions to the Banking Supervision Handbook. We also published a regulatory impact assessment.

Adjustments to restrictions on high-LVR residential mortgage lending

We published a consultation paper on further adjustments to the LVR policy.

Changes to capital adequacy requirements

We finalised changes to the capital adequacy requirements for residential mortgage loans for investment properties. This included defining owner-occupied property for the purposes of new LVR restrictions.

We also published a response to submissions on changes to the LVR restriction rules and released a regulatory impact assessment as part of the response to submissions. The changes were reflected in an updated version of the Banking Supervision Handbook (BS19).

LVR consultation paper proposes tighter investor LVR restrictions

We published a consultation paper on proposed changes to the LVR policy (amended 4 June), including tighter restrictions on Auckland investor lending.

Revised framework for restrictions on high-LVR residential mortgage lending

We released our response to submissions on the construction exemptions in BS19 in March 2014. This was reflected in a revised Framework for restrictions on high-LVR residential mortgage lending (released November 2015), and we then finalised the exemption. We also consulted on some minor changes to BS2A/BS2B that required minor consequential changes to BS19. These were finalised in June 2014.

Exemption for high-LVR construction lending

We announced we would introduce an exemption for high-LVR construction lending. We published questions and answers about the construction lending exemption, a related consultation paper, and a draft of Framework for restrictions on high-LVR residential mortgage lending.

Restrictions on high-LVR mortgage lending

We released documents relating to the development and implementation of restrictions on high-LVR mortgage lending.

Intention to implement restrictions on high-LVR lending

We announced our intention to implement restrictions on high LVR lending. From 1 October 2013, banks were required to restrict new residential mortgage lending at LVRs over 80% (a deposit of less than 20%) to no more than 10% of the dollar value of their total new residential mortgage lending. We also released a regulatory impact assessment of this policy.

We also published a response to submissions, a revised framework for restrictions on high-LVR residential mortgage lending, and a revised Statement of Principles.