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RBNZ Publishes Response To Feedback To Proposed Policy For DSRs On Mortgage Lending

RBNZ

The Reserve Bank of New Zealand publishes its response to feedback received on its proposed policy for debt serviceability restrictions (DSRs) on residential mortgage lending:

  • “Our modelling indicates that first-home buyers would be the least impacted by a DTI restriction, with investors impacted the most as they tend to borrow at higher DTIs than other groups on average."
  • “We intend to have the framework finalised by late 2022, so that restrictions could be introduced by mid-2023 if required.”
  • "Banks’ test interest rates have begun to rise in line with market rates, and we expect to see a slowdown in high-DTI lending over the coming months."
  • "We do not see an urgent need to impose an interim test rate floor at this stage, but we are monitoring the situation closely and do not rule out this option if there is a resurgence of risky lending in the housing market."

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