RBNZ Banking Supervision Handbook: BS19 High-LVR Residential Mortgage Lending Restrictions
|
|
| Regulator |
Reserve Bank of NZ |
| Jurisdiction |
NZ |
| Status |
live |
| Applicability |
Platform |
BS19 is the RBNZ Banking Supervision Handbook standard governing restrictions on high
loan-to-value ratio (LVR) residential mortgage lending. It is a macroprudential instrument
designed to limit systemic risk from the housing market by constraining the proportion of new
residential mortgage lending that banks may extend above specified LVR thresholds.
The restrictions differentiate between owner-occupier and residential property investor lending,
with separate LVR speed limits for each category. The speed limits cap new high-LVR lending as a
proportion of total new mortgage lending flow (measured over a rolling six-month period). The RBNZ
sets and adjusts the limits periodically in response to housing market conditions; the current
limits are:
- Owner-occupier: no more than 20% of new residential owner-occupier mortgage lending may be
at LVR >80%.
- Residential investor: no more than 5% of new residential investor mortgage lending may be at
LVR >65%.
Banks are required to monitor and report LVR band distributions quarterly to the RBNZ and disclose
LVR information in quarterly disclosure statements.
BS19 is being superseded by the DTA Lending Standard, which takes effect
1 December 2028. Until that date, BS19 remains the operative LVR restriction for registered banks.
Compliance register
This register maps every material obligation under BS19 to the platform control or institutional
process that satisfies it. It is the static traceability layer for the Totara compliance report —
dynamic data (module build status, test evidence, control test dates) is overlaid at runtime.
Scope legend
| Symbol |
Meaning |
| 🤖 Automated |
Platform enforces or performs the obligation. Primary control mode is GATE, AUTO, CALC, or ALERT. Human action is not required in the normal case. |
| 📊 Evidenced |
Platform captures the evidence trail automatically. Human compliance decision sits on top. Primary control mode is LOG. |
| 🏛 Institutional |
Obligation is met by a process entirely outside the platform — credit committee, board governance, legal. Platform may generate evidence inputs but does not own the process. |
| N/A |
Obligation does not apply to this deployment configuration. |
Build legend
| Symbol |
Meaning |
| ✅ |
Module built and deployed |
| 🔨 |
Module planned — not yet built (build_status: Not started) |
| ❌ |
Uncontrolled gap — no module attributed |
LVR calculation at origination
| Ref |
Obligation |
Scope |
Policy |
Platform controls |
Build |
| BS19 §4 |
Calculate LVR at origination using the loan amount and the lower of purchase price and independent registered valuation |
🤖 Automated |
CRE-001 |
MOD-115 (GATE) — loan cannot settle without LVR calculated using the registered security value; valuation must be on record before settlement proceeds |
🔨 |
| BS19 §4 |
Classify new lending as owner-occupier or residential investor at origination — classification drives the applicable LVR speed limit |
🤖 Automated |
CRE-001 |
MOD-115 (CALC) — property use classification (owner-occupier vs. investor) sourced from application attributes; classification drives the applicable LVR limit tier automatically |
🔨 |
| BS19 §4 |
Apply current RBNZ LVR speed limits as a binding constraint on new mortgage origination |
🤖 Automated |
CRE-001 |
MOD-115 (GATE) — speed limit utilisation monitored in real time; a new high-LVR mortgage is gated if approving it would breach the applicable speed limit for that category |
🔨 |
LVR speed limit monitoring
| Ref |
Obligation |
Scope |
Policy |
Platform controls |
Build |
| BS19 §5 |
Monitor the proportion of new high-LVR lending as a percentage of total new lending flow — owner-occupier and investor separately |
🤖 Automated |
CRE-001 |
MOD-115 (CALC) — LVR band distribution computed in real time across the rolling origination window; owner-occupier and investor categories tracked separately |
🔨 |
| BS19 §5 |
Alert when high-LVR lending proportion approaches the RBNZ speed limit — give time to adjust before a breach |
🤖 Automated |
CRE-001 |
MOD-115 (ALERT) — pre-warning threshold configurable above the RBNZ speed limit (default: 80% of limit); ALERT routed to Head of Credit and CRO automatically |
🔨 |
| BS19 §5 |
Ensure speed limit thresholds are updated promptly when RBNZ revises the LVR restrictions |
🤖 Automated |
CRE-001 |
MOD-115 (CALC) — LVR speed limit parameters are configuration-managed; RBNZ changes require an authorised configuration update, not a code change; effective date enforced automatically |
🔨 |
Ongoing LVR portfolio monitoring
| Ref |
Obligation |
Scope |
Policy |
Platform controls |
Build |
| BS19 §6 |
Maintain current LVR data on the portfolio — recalculate LVR as drawn balance changes and when valuations are refreshed |
🤖 Automated |
CRE-001, CRE-005 |
MOD-115 (CALC) — LVR recalculated daily using current drawn balance (from MOD-001) against most recent registered property valuation; MOD-121 (CALC) — LVR recalculated after each drawdown event |
🔨 |
| BS19 §6 |
Trigger valuation review for high-LVR loans approaching risk weight boundary (LVR 80%) |
🤖 Automated |
CRE-001 |
MOD-115 (ALERT) — valuation review alert triggered automatically when a loan's LVR approaches the 80% boundary from below; prevents stale valuations leaving a loan in the wrong risk weight tier |
🔨 |
LVR reporting
| Ref |
Obligation |
Scope |
Policy |
Platform controls |
Build |
| BS19 §7 |
Report LVR band distribution to RBNZ quarterly — new lending and portfolio stock, by LVR band and category |
🤖 Automated |
CRE-001 |
MOD-036 (AUTO) — RBNZ BS19 prudential return populated from MOD-115 LVR band distribution data; no manual data extraction or reformatting |
🔨 |
| BS19 §7 |
Disclose LVR distribution in quarterly disclosure statements (BS3B/BS3C) |
🤖 Automated |
CRE-001 |
MOD-036 (AUTO) — LVR disclosure tables populated from the same MOD-115 data used for the RBNZ return; single source, no reconciliation gap |
🔨 |
| BS19 §8 |
Notify RBNZ promptly if the speed limit is breached or a breach is anticipated |
🤖 Automated |
CRE-001 |
MOD-115 (ALERT) — speed limit ALERT provides the trigger; MOD-036 (AUTO) — RBNZ notification workflow initiated from ALERT |
🔨 |
Exemptions and de minimis lending
| Ref |
Obligation |
Scope |
Policy |
Platform controls |
Build |
| BS19 §9 |
Track and report exempt lending (bridging loans, new builds exempt from LVR restrictions) separately |
🤖 Automated |
CRE-001 |
MOD-115 (CALC) — loan type flag applied at origination identifies exempt categories; exempt loans excluded from speed limit numerator and denominator calculations automatically |
🔨 |
| BS19 §9 |
Ensure de minimis or remediation lending does not inflate the speed limit figures |
🤖 Automated |
CRE-001 |
MOD-115 (CALC) — classification rules applied at the time of origination; reclassification is configuration-controlled and logged with effective date |
🔨 |
| Obligation |
Owner |
Platform evidence input |
| Board approval of LVR policy and speed limit management approach |
Board Credit Committee |
MOD-115 provides portfolio LVR distribution and speed limit utilisation data |
| Credit policy exception process for high-LVR lending above speed limit |
Head of Credit / Board |
MOD-115 GATE generates the exception trigger; exception approval is institutional |
| RBNZ engagement on speed limit changes and interpretation |
CFO / CEO |
MOD-115 configuration updated on RBNZ instruction |
| External auditor review of LVR disclosure |
External Auditor |
MOD-036 provides data lineage; MOD-115 provides the LVR calculation audit trail |
Coverage summary
| Area |
Total obligations |
Platform automated 🤖 |
Platform evidenced 📊 |
Institutional 🏛 |
N/A |
| LVR calculation at origination |
3 |
3 |
0 |
0 |
0 |
| Speed limit monitoring |
3 |
3 |
0 |
0 |
0 |
| Portfolio monitoring |
2 |
2 |
0 |
0 |
0 |
| LVR reporting |
3 |
3 |
0 |
0 |
0 |
| Exemptions |
2 |
2 |
0 |
0 |
0 |
| Total |
13 |
13 (100%) |
0 (0%) |
0 (0%) |
0 (0%) |
BS19 is the most fully automated of the BS series standards — the LVR engine (MOD-115) provides
real-time enforcement at origination, continuous portfolio monitoring, and automated reporting.
All attributed modules are currently build_status: Not started.
The DTA Lending Standard (effective 1 December 2028) supersedes BS19 — see
nz-dta-lending for the forward obligation register.
| Policy |
Title |
| CRE-001 |
Credit Risk Management Policy |
| CRE-005 |
Concentration Risk Policy |
See D02 Credit Risk for the full risk domain.
Official documentation
Policies referencing this standard
(None yet)
Compiled 2026-05-22 from source/entities/regulations/nz-bs19.yaml