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Are new home loan regulations proving effective?


The share of new mortgage lending going to borrowers with low deposits halved in October, the first month in which the Reserve Bank's curbs on such loans applied.

Of the $4.47 billion of new mortgage lending last month 12.8 per cent was at a loan-to-value ratio (LVR) of more than 80 per cent, down from 25.5 per cent of the $4.7 billion lent in September.

Earlier in the year high LVR loans represented around 30 per cent of new lending, Reserve Bank deputy governor Grant Spencer said.

Of the $571 million of high LVR loans made last month $53 million was to borrowers exempt from the restrictions, such as those guaranteed under Housing New Zealand's Welcome Home Loans scheme.

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