The Reserve Bank of New Zealand (RBNZ) today announced that it will tighten lending rules for mortgages from 1 November, but expects banks to comply with the “spirit” of the new rules immediately.
Specifically, the new rules will see banks now restricted to just 10% of the new lending for mortgages that make up over 80% of the value of the property. Previously this so-called ‘speed limit’ was set at 20%.
This follows other measures implemented earlier this year, including investors being slapped with 40% deposit rules from May and the Ardern Government ending the tax deductibility on interest for investors back in March.
