Overview

• The Reserve Bank opened consultation to lift the share of new lending allowed to low‑deposit borrowers, proposing 25% for owner‑occupiers and 10% for investors.
• For owner‑occupiers the change applies to deposits under 20%, and for investors to equity under 30%, up from current caps of 20% and 5% respectively.
• The move is intended to take effect from 1 December 2025 following consultation, with the Financial Policy Committee responsible for administering LVR and DTI settings.
• DTI limits introduced in July 2024 cap most owner‑occupier loans at six times gross income and investor loans at seven times, which the RBNZ says reduces risky lending.
• Economists expect only a marginal market impact given low high‑LVR volumes—$991m of $7.5b in August—and Finance Minister Nicola Willis says the change should help first‑home buyers.