Putting the squeeze on “interest-only” home loans

Last week the Reserve Bank announced that it might introduce tighter loan-to-value ratio restrictions for investors in “Auckland and other regions” and that it might also implement limits on debt-to-income ratios. Neither suggestion is a surprise to us. The former of these ideas has been bandied about since house prices started rocketing in regions outside of Auckland, while the latter has become increasingly discussed since the UK implemented debt-to-income ratios limits in 2014, and especially since Auckland house-price-to-income ratios hit 12.3 in the December quarter of last year.