The Reserve Bank is planning to change the rules for home loans. They want to introduce a limit on how much debt people can have compared to their in
The Reserve Bank is planning to change the rules for home loans. They want to introduce a limit on how much debt people can have compared to their income (called DTI limits) and make some changes to how much money people can borrow based on the value of their house (known as LVR rules).
For borrowers, this means:
- They are less likely to borrow more money than they can afford to pay back, which is safer for them.
- It might be easier for some people, especially those buying a home for the first time, to get a loan because of more relaxed rules on loan amounts compared to house values.
- Banks will be more careful about how much they lend, which is good for the overall economy.
- However, these new rules could also make it harder for some people to get a big loan, especially if they already have a lot of debt or want to invest in property.
- Some borrowers might end up paying more in interest.
Overall, these changes are meant to make sure people don’t take on too much debt and to keep the housing market stable.
more info: https://www.rbnz.govt.nz/hub/news/2024/consultation-on-dti-and-lvr-settings
