DTIs would cut thousands out of market
The Reserve Bank has long been concerned about the growth in high DTI mortgage lending that New Zealand has seen in recent years and the financial risks that it poses.
To this end, it has been pushing for the inclusion of a DTI instrument, which would limit the amount that people can borrow to a multiple of their income, in its macro-prudential toolkit for some time.
It has now released a DTI consultation paper and a cost-benefit analysis of the proposed policy and it indicates that a comparatively high number of property investors could be affected should a DTI tool be enacted.
The Reserve Bank estimates that around 2,000 owner occupiers and 9,000 investors a year might not buy a property if there was a limit on high DTI lending.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
![[The Wrap] What the heck is happening at the FMA?](https://goodreturns.publit.io/file/c_fill,w_300,h_200/a6c3bc06-6401-44de-96e2-286c090e132d.jpg)
