Reserve Bank prepares to crack down on housing

A Stuff article.

The Reserve Bank has proposed reducing the amount of lending banks can do for mortgages above a high loan-to-value ratio (LVR) of 80 per cent, from 20 per cent to 10 per cent of their all new housing loans.

Consultations will start with banks later this month, with a view to introducing the new rule in October.

It will also consult in October on implementing debt-to-income (DTI) restrictions and/or “interest rate floors” to prevent house buyers getting over their heads with debt.

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