The RBNZ’s LVR restrictions are not absolute — there are a number of exemptions where standard deposit requirements don’t apply. Knowing these exemptions can make a significant difference for buyers who can’t meet the standard 20% (owner-occupier) or 35% (investor) deposit thresholds.
The main LVR exemptions are: (1) new builds — owner-occupiers up to 90% LVR, investors up to 70% LVR, with no speed limit constraint; (2) bridging loans — up to 12 months, exempt while selling and buying simultaneously; (3) refinancing — no new high-LVR risk created by switching lenders on the same property; (4) First Home Loan — Kāinga Ora guarantee enables 5% deposit outside the speed limit; (5) construction loans — exempt during the build phase. These exemptions apply to bank lending — non-bank lenders are not subject to LVR rules at all.
Exemption 1: New Builds
The most significant and widely available exemption. New residential properties that have not previously been occupied are exempt from the LVR speed limits — meaning banks can lend at:
| Borrower type | Maximum LVR | Deposit required |
|---|---|---|
| Owner-occupier (new build) | 90% | 10% |
| Investor (new build) | 70% | 30% |
What counts as a new build?
- A newly constructed home that has never been lived in
- An off-plan purchase (settling after construction completes)
- A house and land package settling post-construction
- Typically requires a code compliance certificate (CCC) issued within the last 12 months at the time of lending
Why this exemption exists: The RBNZ wants to encourage new housing construction as a supply-side solution to NZ’s housing shortage. Exempting new builds from speed limits gives banks and buyers a direct incentive to choose new construction.
For first home buyers: Combined with the First Home Grant (higher price caps for new builds) and the First Home Loan, the new build exemption makes new construction the most accessible path into homeownership for those with limited deposits.
Exemption 2: Bridging Loans
When you’re buying a new property before selling your existing home, you may need a short-term bridging loan to cover the deposit or the full purchase price until your sale settles.
LVR exemption: Bridging loans are exempt from LVR restrictions, provided:
- The bridging loan is for 12 months or less
- You have an unconditional agreement to sell your existing property, OR the loan is reasonable in the lender’s assessment of your ability to repay once the sale completes
- The loan is structured as a genuine bridging facility (not a permanent high-LVR loan)
Banks still assess serviceability on bridging loans — they want to see that you can manage the total debt burden while holding two properties, and that the sale will actually happen. See Bridging Loan NZ for full detail.
Exemption 3: Refinancing
When you refinance a mortgage — switching from one lender to another — you’re not creating new high-LVR lending risk. The LVR is unchanged; only the lender changes. The RBNZ therefore exempts refinancing from the LVR speed limit.
Practical effect: If your home is currently mortgaged at 85% LVR (high LVR), you can refinance to another bank at the same 85% LVR without that bank needing to count it against its speed limit allocation.
Limitation: The refinance must be for the same or lower principal amount — you can’t top up to a higher LVR on a refinance and claim the exemption. Any new money (top-up) is subject to standard LVR rules.
Exemption 4: First Home Loan (Kāinga Ora Guarantee)
The First Home Loan is not technically an LVR exemption — but it achieves a similar effect. Under the scheme:
- Kāinga Ora guarantees the high-LVR portion of the mortgage to the lending bank
- The bank makes the loan at up to 95% LVR (5% deposit) but is protected against loss on the high-LVR portion
- Because the guarantee covers the bank’s high-LVR risk, the loan does not need to count against the bank’s speed limit allocation
Result: The First Home Loan enables 5% deposit lending outside the standard LVR speed limit. Banks can offer more of these loans than they could if they counted against the 15% speed limit.
Eligibility: Income caps ($95,000 single, $150,000 combined), price caps by region, KiwiSaver membership required. See First Home Loan NZ.
Exemption 5: Construction Loans
Loans made for the purpose of constructing a new dwelling are treated differently during the construction phase:
- The loan-to-value ratio during construction is assessed against the estimated completed value of the property, not the value of the incomplete build
- Banks use an “as-if-complete” valuation to establish the LVR
- Drawdowns during the build phase are not subject to the standard LVR speed limit
Once construction completes and the property is first occupied, it transitions to a standard mortgage — but still retains the new build exemption LVR limits (90% owner-occupier, 70% investor) because it’s a new build.
Exemption 6: Certain Restructuring and Hardship Situations
The RBNZ framework allows banks flexibility in specific hardship and restructuring situations:
- Hardship restructuring: Where a borrower is in financial difficulty, banks can restructure the loan (extend term, change structure) without the restructured loan counting as new high-LVR lending — even if the LVR is above the standard threshold due to property value falls
- Court-ordered transfers: Where property is transferred by court order (e.g. relationship property settlement), the resulting mortgage may exceed standard LVR limits without triggering the speed limit rule
Non-Bank Lenders — Entirely Exempt
Non-bank lenders (finance companies, credit unions, some building societies) are not currently subject to RBNZ LVR restrictions. This means:
- Non-bank lenders can lend at any LVR they choose
- This is subject to their own credit policies and funding constraints
- Non-bank rates are significantly higher than bank rates to compensate for the additional risk
- The RBNZ has flagged potential future extension of LVR rules to non-banks, but this has not been implemented as at 2026
See Non-Bank Lenders NZ for specific lenders and rates.
Frequently Asked Questions
If I’m buying a new build, can I really get a mortgage with 10% deposit?
Yes — the new build LVR exemption allows banks to lend at up to 90% LVR (10% deposit) for owner-occupier new builds, with no speed limit constraint. Individual bank credit policies still apply — your income, credit history, and the property itself must meet bank standards — but the LVR restriction is not the barrier it is for existing properties.
Can I use the bridging loan exemption to buy without selling first?
The exemption is designed for situations where you’re genuinely selling — either with an unconditional agreement to sell or where the bank is satisfied the sale will occur within 12 months. Using a bridging loan to purchase a second property with no firm plan to sell the first is unlikely to be approved under the exemption.
Does the refinancing exemption apply if I want to borrow more?
No — only the amount being refinanced (matched to the existing balance) is exempt. Any increase in borrowing (top-up) is subject to the standard LVR rules. A top-up to a high-LVR position uses the owner-occupier speed limit allocation.
How long has NZ had LVR restrictions?
The RBNZ introduced LVR restrictions for the first time in October 2013. They were suspended briefly during COVID (May 2020 to March 2021) and have been adjusted multiple times since then. They are a permanent feature of NZ mortgage regulation.
Are the exemptions the same for all banks?
Yes — the exemption framework is set by the RBNZ and applies equally to all registered banks. Banks cannot grant their own exemptions outside the RBNZ framework. Non-banks are outside the framework entirely.