Debt to income limits could slow down investors
According to the Treasury papers, DTIs are an alternative macro-prudential tool that could offer an alternative, or additional, way of managing financial system vulnerability by targeting the likelihood of default.
DTIs can be difficult to implement in practice, which is why LVRs were chosen in 2013, the papers said.
“We welcome the RBNZ’s work on DTI data since then, and look forward to the developments in this area.”
Earlier this year, the RBNZ’s Bernard Hodgetts told media the bank was doing work on the debt-to-income ratios of residential property owners.
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