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 late 2026): Owner-occupiers — banks can lend up to 25% of new residential mortgage commitments above 80% LVR (i.e. with less than 20% deposit); eased from 20% on 1 December 2025. Investors — banks can lend up to 10% of new investor commitments above 70% LVR (less than 30% deposit); eased from 5% on 1 December 2025. 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) | 25% of new commitments can be at 80–90% LVR |
| Residential investor | 70% (30% deposit) | 10% of new commitments can be at 70–80% LVR |
| New build (owner-occupier) | Exempt | No speed limit — full bank discretion |
| New build (investor) | 80% (20% 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
The current rule: Since 1 December 2025, up to 25% of each bank's new owner-occupier lending can go to borrowers with less than a 20% deposit, and up to 10% of new investor lending to investors with less than a 30% deposit.
Owner-occupier high-LVR (80–90% LVR): The 25% speed limit (eased from 20% on 1 December 2025) means that of every $100 of new owner-occupier lending, up to $25 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 10% limit (eased from 5% on 1 December 2025) is still restrictive. In practice, relatively few investor loans are approved below 30% 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% |
| July 2024 | DTI limits introduced; investor LVR eased from 65% to 70% (30% deposit) |
| December 2025 | Speed limits eased: owner-occupier high-LVR allowance 20%→25%; investor high-LVR allowance 5%→10% |
The RBNZ eased both the LVR speed limits and, separately, the investor LVR threshold itself (65%→70%) as part of a broader move to rely more on DTI limits (introduced July 2024) to manage lending risk, allowing LVR settings to be less restrictive.
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
- 80% LVR (20% 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 (25% of bank lending, eased from 20% on 1 December 2025) 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 30% deposit requirement is the binding constraint for most investors. The 10% speed limit (eased from 5% on 1 December 2025) means investor lending with less than a 30% deposit (above 70% LVR) is limited 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: 70% |
| 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, 25% of lending, eased from 20% on 1 December 2025), 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 further?
The RBNZ eased the investor LVR threshold (65%→70%) on 1 July 2024 and the speed limits (owner-occupier 20%→25%, investor 5%→10%) on 1 December 2025, citing DTI limits (in place since July 2024) as providing an additional layer of protection. Whether it eases further depends on house price growth and credit risk. 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.