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Are new home loan regulations proving effective?

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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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