The Reserve Bank is proposing the removal of...>

RBNZ: The Reserve Bank is proposing the removal of mortgage loan-to-value ratio

(LVR) restrictions in line with the Bank's financial stability mandate. The

proposal is in response to the economic downturn caused by the COVID-19

pandemic. The LVR requirements are one of the macro-prudential tools that the

Reserve Bank has available to respond to cyclical pressures. "LVRs were

introduced as a macro-prudential financial stability tool in October 2013 and

have been adjusted over time. Adjusting the use and calibration of

macro-prudential tools in response to economic conditions is how they are

intended to be used", Deputy Governor and General Manager of Financial Stability

Geoff Bascand says. This move will help banks to keep lending to support

customers, including with mortgage deferrals. As is normal for changes to

macro-prudential measures, we are consulting on this proposal. In this case,

consultation is open for seven days. Feedback will be collated from industry

stakeholders over this period and a decision will be made promptly after that.

- Link: https://tinyurl.com/ybdj7j8g