RBNZ proposes to remove loan-to-value ratio lending restrictions

[WELLINGTON] The Reserve Bank of New Zealand (RBNZ) said on Tuesday it was proposing to remove mortgage loan-to-value ratio (LVR) lending restrictions in response to the economic downturn caused by the coronavirus pandemic.

RBNZ said in a statement it would do consulting on the proposal for seven days and a decision would be taken after that.

If the decision is made to remove the restrictions, the Reserve Bank will monitor lending activity and feedback from retail banks over the next 12 months. After that period, it will review whether to reinstate LVR restrictions, it said.

REUTERS