The Reserve Bank (RBNZ) has clarified loan-to-value ratio (LVR) restrictions are here to stay, and won’t be completely removed if debt-to-income (DTI) restrictions are introduced. Sure, the RBNZ might ease LVRs if it introduces DTIs, but it isn’t planning to remove LVRs altogether. In fact, it sees LVRs as a “permanent device to maintain resilience of the financial system”. The RBNZ also plans to start publishing projections for how it sees itself applying these macroprudential tools. LVRs and DTIs complimentaryHis comments follow the RBNZ on Wednesday announcing plans to work with banks to get ready to start implementing DTIs by mid-2023 “if required”.

Source: New Zealand Herald April 28, 2022 01:20 UTC