The Reserve Bank of New Zealand (RBNZ) uses loan-to-value ratio (LVR) restrictions as a macro-prudential tool to limit risk in the housing lending market. The rules set minimum deposit requirements and cap the share of high-LVR lending banks can do. In 2026, the framework has eased modestly from its 2021 peak but remains more restrictive than pre-COVID settings.
Current LVR rules (as at early 2026): Owner-occupiers — banks can lend up to 15% of new residential mortgage commitments above 80% LVR (i.e. with less than 20% deposit). Investors — banks can lend up to 5% of new investor commitments above 65% LVR (less than 35% deposit). New builds are exempt from these speed limits. The RBNZ reviews LVR settings periodically — check rbnz.govt.nz for the latest.
Current LVR Rules — Summary Table (2026)
| Borrower type | Standard LVR limit | Speed limit (% of new lending that can exceed limit) |
|---|---|---|
| Owner-occupier | 80% (20% deposit) | 15% of new commitments can be at 80–90% LVR |
| Residential investor | 65% (35% deposit) | 5% of new commitments can be at 65–80% LVR |
| New build (owner-occupier) | Exempt | No speed limit — full bank discretion |
| New build (investor) | 70% (30% deposit) | Exempt from standard investor speed limit |
| Bridging loans | Exempt | Specific conditions apply |
Understanding the Speed Limit
The speed limit doesn’t mean you definitely can get a high-LVR loan — it means banks are allowed to do some high-LVR lending. In practice:
- Banks allocate their high-LVR capacity carefully — typically to their strongest applications
- Being above 80% LVR means you’re competing with other buyers for limited bank capacity
- Rates are usually higher for high-LVR loans (mortgage insurance or risk premium)
- If a bank has used up its quarterly speed limit allocation, they may stop taking high-LVR applications entirely until the next quarter
Owner-occupier high-LVR (80–90% LVR): The 15% speed limit means that of every $100 of new owner-occupier lending, up to $15 can be at less than 20% deposit. In a competitive market with high application volumes, this fills quickly. Banks prioritise strong income, credit history, and stable employment.
Investor high-LVR: The 5% limit is very restrictive — almost negligible. In practice, very few investor loans are approved below 35% deposit.
Recent Changes to LVR Settings
History of LVR changes (key milestones)
| Date | Change |
|---|---|
| May 2020 | LVR restrictions suspended — COVID response |
| March 2021 | Restrictions reimposed; investor LVR tightened to 70% |
| May 2021 | Investor LVR tightened further to 60% |
| October 2021 | Investor LVR at 60%; owner-occupier at 80% |
| June 2023 | Investor LVR eased from 60% to 65% |
| 2024 | Settings maintained; new build exemptions expanded |
| 2025–2026 | Settings remain: owner-occupier 80%, investor 65%; RBNZ monitoring for potential further easing |
The RBNZ has signalled it will consider easing LVR restrictions further if house price pressures remain contained. However, with house prices recovering in some markets in 2025–2026, the RBNZ has been cautious about premature easing.
New Build Exemption — Why It Matters
New builds are exempt from LVR speed limits — meaning banks can lend at:
- 90% LVR (10% deposit) for owner-occupier new builds — no speed limit constraint
- 70% LVR (30% deposit) for investor new builds — no speed limit constraint
This exemption exists because:
- New builds add to housing supply (a RBNZ policy goal)
- Risks are considered lower (new homes with warranties, less deferred maintenance)
- It provides a direct policy incentive for new construction
For buyers who can access new builds within their price range, the deposit requirement is significantly lower. The First Home Grant’s higher price caps for new builds amplify this advantage.
How LVR Restrictions Affect Different Buyers
First home buyers (below 20% deposit)
Must access the high-LVR speed limit allocation (15% of bank lending) or use the First Home Loan (Kāinga Ora guaranteed, enabling 5% deposit outside the speed limit). Without the First Home Loan, qualifying for a high-LVR owner-occupier loan requires a strong application. See Low Deposit Mortgage NZ.
Owner-occupiers (20%+ deposit)
Not affected by LVR restrictions — unlimited access to standard lending at standard rates.
Investors
The 35% deposit requirement is the binding constraint for most investors. The 5% speed limit means above-35%-LVR investor lending is almost unavailable at main banks. Non-bank lenders may be more flexible at higher rates.
New build buyers
Significant advantage — lower deposit requirements with no speed limit. Both owner-occupiers and investors benefit.
LVR vs DTI — Two Separate Constraints
Since July 2024, the RBNZ has operated both LVR restrictions and DTI restrictions simultaneously. They address different risks:
| Tool | What it limits | Current limit |
|---|---|---|
| LVR | Loan as % of property value — collateral risk | Owner-occ: 80%; Investor: 65% |
| DTI | Loan as multiple of income — serviceability risk | Owner-occ: 6×; Investor: 7× |
A borrower must satisfy both constraints. High-income borrowers with small deposits hit the LVR limit; low-income borrowers with large deposits hit the DTI limit. See DTI Restrictions NZ.
Frequently Asked Questions
Can I get a mortgage with less than 20% deposit?
Yes — through the high-LVR speed limit (bank discretion, 15% of lending), the First Home Loan (Kāinga Ora guarantee for 5% deposit), or a new build purchase (exempt from speed limits up to 90% LVR). See Low Deposit Mortgage NZ.
Will the RBNZ ease LVR restrictions in 2026?
The RBNZ has indicated it will monitor housing market conditions. If house price growth remains moderate and credit risk is contained, further easing is possible — particularly for owner-occupiers. Investors are likely to remain at 65% LVR for longer, given the RBNZ’s focus on financial stability risk from investor lending. Check rbnz.govt.nz for the latest consultation documents.
Do LVR rules apply to all lenders?
LVR restrictions apply to all registered banks in NZ. Non-bank lenders (finance companies, credit unions) are not currently subject to the RBNZ’s LVR framework — though this is under review. Non-bank lenders can offer higher-LVR loans at higher interest rates.
How does the RBNZ calculate whether a bank is within its speed limit?
Banks report their new residential mortgage commitments to the RBNZ quarterly. The RBNZ calculates the proportion of commitments above the LVR threshold and monitors compliance. Banks that exceed the speed limit face RBNZ sanctions and are required to take corrective action.
Are renovated or significantly improved properties considered new builds?
No — only newly built properties that haven’t previously been lived in (and typically have a code compliance certificate within the last 12 months) qualify for the new build LVR exemption. Renovated existing homes are subject to standard LVR rules.