Reserve Bank to loosen mortgage lending rules

The Reserve Bank is loosening Loan-to-Value Ratio (LVR) restrictions from 1 December, making it easier to secure a mortgage with a smaller deposit.

- Owner-occupiers: Banks can increase new lending with an LVR above 80% from 20% to 25%.

- Investors: New lending with an LVR above 70% will increase from 5% to 10%.

This change follows the introduction of Debt-to-Income (DTI) rules, which remain unchanged. The move aims to improve credit access without significantly impacting house prices.