(Reuters) – The Reserve Bank of New Zealand announced Wednesday that it will finalize a framework for debt servicing restrictions on residential mortgage lending (DSRs), by the end of 2022, and be able, if necessary, to implement it by the middle of 2023.

As it is dealing in a hot housing market, the RBNZ wanted feedback about the design and merits of DSRs for residential mortgage loans from banks and other industry players.

Central bank stated that first-home buyers would be the least affected by a debt to-income restriction (DTI), a form of DSR that places restrictions on the maximum amount of debt a borrower may owe. It is a limitation of how many income a borrower has.

The report stated that the test interest rates at banks has begun to increase in line with market rates and that a decrease in high-DTI lending will be expected over the coming months.

RBNZ stated that they do not believe there is an immediate need to set an interim floor rate for interest. This was used by banks as a way to assess borrowers ability to pay back their loans, in the event of rising rates.

The company said it is closely watching the situation, and doesn’t rule out any option in case of an increase in risky lending.