New loan restrictions mean the "poor middle-class" hoping to buy their first home will be left out in the cold as banks cherry pick their ideal customers.

The curbs on low-deposit home lending announced by the Reserve Bank yesterday are likely to prove more restrictive than it thinks, the Bankers Association warns.

The Reserve Bank has moved a step closer to curbing the low-equity housing loans that banks can make.

The NZ dollar has dropped a cent and a half in reaction to Fonterra's announcement.