Reserve Bank to loosen mortgage lending rules

From 1 December, the Reserve Bank will ease Loan-to-Value Ratio (LVR) restrictions, making it easier for some buyers to secure a mortgage with a smaller deposit.

The changes allow banks more flexibility for high-LVR lending:

- Owner-occupiers: The allowance for lending with deposits under 20% rises from 20% to 25%.

- Investors: The allowance for lending with deposits under 30% increases from 5% to 10%.

This move is supported by stable market conditions and existing Debt-to-Income (DTI) rules, which remain unchanged.