RBNZ LVR Restrictions 2019

The following has been supplied by the RBNZ and has not been altered in any way. Updated Janaury 2018 and subject to change without notice.

 

Summary of changes to LVR rules

 

Existing restrictions,
until 30 September 2016

New restrictions,
from 1 January 2018

New restrictions,
from 1 January 2019

Borrowers who are owner-occupiers

In Auckland, 10% of a bank’s total lending to owner-occupiers can be to borrowers with a deposit less than 20% of the house value.

Main changes are underlined

 

For all of New Zealand, 15% of a bank’s total lending to owner-occupiers can be to borrowers with a deposit less than 20% of the house value.

Main changes are underlined

 

For all of New Zealand, 20% of a bank’s total lending to owner-occupiers can be to borrowers with a deposit less than 20% of the house value.

Outside Auckland, 15% of a bank’s total lending can be to borrowers with a deposit less than 20% of the house value.

Borrowers who are residential property investors

In Auckland, 5% of a bank’s total lending to residential property investors can be to borrowers with a deposit less than 30% of the house value.

For all of New Zealand, 5% of a bank’s total lending to residential property investors can be to borrowers with a deposit less than 35% of the house value.

For all of New Zealand, 5% of a bank’s total lending to residential property investors can be to borrowers with a deposit less than 30% of the house value.

Outside Auckland, owner-occupiers and residential property investors treated the same. 15% of a bank’s total lending can be to borrowers with a deposit less than 20% of the house value.

In Auckland, borrowers who include an owner-occupied residence in a portfolio of mortgaged houses are allowed to borrow up to 70% of the value of the entire property portfolio.

For all New Zealand, borrowers who include an owner-occupied residence in a portfolio of mortgaged houses are allowed to borrow up to 80% of the value of their owner-occupier home and 65% of the value of their investment properties.

For all New Zealand, borrowers who include an owner-occupied residence in a portfolio of mortgaged houses are allowed to borrow up to 80% of the value of their owner-occupier home and 70% of the value of their investment properties.

Exemptions from the LVR restrictions

Loans to borrowers building a new residence are exempt.

The exemption doesn’t apply for a borrower buying a residence where construction has progressed beyond ground works.

The exemption applies for borrowers who are owner-occupiers and who are residential property investors.

Loans to borrowers building a new residence are exempt.

The loan must be for a residence that has been completed within the previous six months and it must be bought from the developer.

The exemption applies for borrowers who are owner-occupiers and who are residential property investors.

The LVR rules do not prescribe the size of a deposit for new residences.

No change

Loans are exempt if used for remediation after a fire, earthquake, or to bring a residence up to new building codes.

The exemption applies for owner-occupiers and for residential property investors.

Loans are exempt if used for remediation after a fire, earthquake, to bring a residence up to new building codes, or to comply with new rental property standards (for example, insulation).
The exemption applies for owner-occupiers and for residential property investors.

No change

Low-deposit borrowers using the Housing New Zealand Welcome Home Loan scheme to buy their first-home are exempt from the LVR rules.

Low-deposit borrowers using the Housing New Zealand Welcome Home Loan scheme to buy their first-home are exempt from the LVR rules.

No change

 

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