BNZ reintroduces LVR limits

The big four bank is returning to its pre-Covid LVR limits, it said today.

As of December 7, the bank will require investors to have a 30% deposit to take out a home loan.

BNZ's decision comes after the Reserve Bank of New Zealand removed LVR requirements at the height of the Covid crisis, only to indicate it will bring them back in March.

BNZ said it had taken a "prudent and careful approach to lending, irrespective of LVR settings".

Dan Huggins, BNZ executive for customer, products and services, said: "Given the importance of ensuring home ownership remains within reach for New Zealanders and that residential property prices remain sustainable, we believe the right thing to do is to move back to our pre-Covid-19 loan-to-value settings."

The bank U-turns arrive amid growing pressure on lenders to take some heat out of the housing market.

The government is cranking up the pressure on the Reserve Bank to do more to monitor house price inflation, after low rates fuelled an unexpected boom since the pandemic.