The Reserve Bank wants to be able to stop people taking out mortgages that are too big compared to their incomes.
It wants debt-to-income restrictions (DTIs), which limit the amount that people can borrow to a multiple of their income, added to its macroprudential toolkit, alongside loan-to-value (LVR) restrictions.
The restrictions are used in other markets around the world, such as Britain, where borrowers must have a loan no bigger than 4.5 times their income. The Reserve Bank is suggesting a limit of five times.
The size of New Zealand mortgages compared to incomes has increased sharply over the past 30 years. The Reserve Bank said increases since 2014 partly reflected the drop in interest rates over that time, but it was possible that rates could rise again in future.
from
http://www.stuff.co.nz/business/93473314/Debt-to-income-ratio-would-stop-thousands-from-buying-houses-RBNZ
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