Second, banks noted that the proposed 2 percent speed limit for high LVR investor lending was insufficient to accommodate special circumstances such as extra lending required to provide assistance to borrowers in hardship. In response we are adopting a higher speed limit of 5 percent on high LVR investor lending.
This will provide banks with more scope to manage the existing pipeline of pre-approved lending. Based on our experience with the existing LVR speed limit, it is expected that the actual flow of high LVR lending to Auckland investors will settle well below 5 percent as banks adopt a buffer to ensure compliance.