RBNZ pushes go button on DTI restrictions

Banks will need to comply with the new restrictions from that date.

The DTI restrictions will allow banks to make 20% of new owner-occupier lending to borrowers with a DTI ratio over 6 and 20% of new investor lending to borrowers with a DTI ratio over 7.

LVRs will be eased to allow banks to make 20% of owner-occupier lending to borrowers with an LVR greater than 80% and 5% of investor lending to borrowers with an LVR greater than 70%.

DTI restrictions create limits on the amount of high-DTI lending banks can make (i.e. where the borrower has taken on a high amount of debt relative to their gross or pre-tax income).