LVR Rules for Property Investors - What Changed in December 2025

The Reserve Bank of New Zealand eased Loan-to-Value Ratio (LVR) restrictions in December 2025, improving the borrowing conditions for property investors and opening access for more buyers. Here is exactly what changed and what it means for Canterbury investors.

What Changed from 1 December 2025

For investors buying existing properties: banks can now make up to 10% of new investor lending to borrowers with deposits under 30%, up from 5% previously. This means a 30% deposit ($180,000 on a $600,000 property) remains the standard threshold for investor lending, but the speed limit on sub-30% lending has doubled from 5% to 10% of new investor loans. In practical terms, more investors with deposits between 20-30% can now access bank lending for existing investment properties, though it is not guaranteed and depends on each bank's appetite to use their speed limit allocation.

For investors buying new builds: LVR restrictions do not apply to new builds at all. Investors can borrow up to 80% of a new build's value (20% deposit) without any LVR constraint. This has been the rule for new builds since 2021 and was not changed in December 2025.

For Owner-Occupiers

As a reference point for comparison: from 1 December 2025, banks can make up to 25% of new owner-occupier lending to borrowers with deposits under 20%, up from 20% previously. This is more generous than the investor rules, which is the intended policy design - first home buyers and owner-occupiers face less restrictive LVR constraints than investors.

How LVR and DTI Work Together

The RBNZ has said that having both DTI and LVR restrictions in place allows each tool to be set slightly less restrictively than if only one were in use. They are complementary tools: LVR protects against the impact of defaults by reducing potential losses, while DTI reduces the probability of default by targeting borrower ability to repay. For Canterbury investors, this means: you need sufficient deposit to meet LVR requirements, AND sufficient income relative to debt to meet DTI requirements. Both constraints must be satisfied, not just one.

Practical Implications for Canterbury Investors

The December 2025 LVR easing has meaningfully improved access for investors who have been building deposits toward the 30% threshold. For investors considering new builds in Rolleston, Lincoln, Halswell, or Wigram, the 20% deposit requirement remains a more accessible entry point than the 30% required for most existing properties. Canterbury's relative affordability - property values below Auckland and Wellington - also means the absolute deposit amounts required are lower, making the deposit hurdle more achievable for Canterbury-focused investors than for those targeting higher-cost cities.

LVR data from RBNZ, Harcourts (DTI and LVR guide), and One Stop Financial. For general information only - not financial or mortgage advice. Always consult a qualified mortgage adviser.