RBNZ says debt-to-income limit of five times would be cut risk of housing crash

Thu, 08 Jun 2017

By Paul McBeth June 8 (BusinessDesk) - The Reserve Bank says setting a limit on home mortgages of more than five times income would make an appropriate addition to the macro-prudential toolkit it could call on to prevent a housing market crash. The central bank reached that conclusion after a cost-benefit analysis of its options for responding to a housing bubble that could threaten financial stability and has released a consultation paper for feedback. The RBNZ found that limiting lending at a debt-to-income ratio of five times could be...

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