The Reserve Bank of New Zealand has eased restrictions on bank lending, but has also indicated it sees loan to value ratio restrictions as a permanent feature of the banking system.From January 2019, up to 20 per cent of new mortgage loans to owner-occupiers can be high LVR loans (ie with a deposit of less than 20 per cent). This is up from the current limit of 15 per cent of loans.Restrictions on investor lending have also been eased. Up to 5 per cent of new loans to property investors can be to borrowers with deposits of less than 30 per cent, lowered from 35 per cent.It is the second time the regulator has eased the LVR restrictions, which were first introduced in 2013 before being loosened slightly in November 2017. RBNZ governor Adrian Orr said both mortgage credit growth and house price inflation had eased to more sustainable rates and this had "reduced the riskiness of new bank lending to housing". "If bank lending standards are maintained where they have been over recent months then further easing could be possible over the coming next few years," he added."We will be, I would say, over the next six to 12 months , providing as best we can a flight path and timeline for how we think about the LVRs going forward."He said that, although credit growth had "slowed to something where we can say is more understandable and safe", the question of "cause and effect is always the tough one"."Has that slowed because we deliberately  put the brakes or have the banks both used the brakes and re-engaged their own brains around responsible lending? That is always to be tested." Asked when LVRs might be removed completely, Orr said: "I can't recall when we ever said they were only meant to be temporary. They are an instrument that is used for cyclical issues. Where we are at present is we are saying: 'will an end point, a neutral part of the cycle be zero as a setting for LVRs or something positive?" and we haven't landed on that yet." "The LVRs are in place now and forever, just what level they are set is going to be a function of all that complexity of what is facing this industry."  The RBNZ also said it was pleased to see that first-home buyers were getting good access to the higher LVR loans "meaning banks are thinking hard about the allocation of loans". The bank said two-thirds of higher LVR loans were going to first-home buyers, and it expects that may rise to around 45 per cent with the changes.