The Reserve Bank has been told to stick to its knitting by the Treasury, with officials warning that rules on mortgage borrowing need to be within its mandate.

In documents released on Thursday evening, Treasury officials also warned that the original loan to value restrictions put in place by the Reserve Bank may have led to more activity by property investors. It follows numerous claims that the rules have hurt first time buyers.

In a briefing for Secretary to the Treasury Gabriel Makhlouf, officials said they agreed with the Reserve Bank that a pick-up on the Auckland housing market "could potentially pose a threat to financial stability" in the coming years.

"However, Treasury has been engaging with the RBNZ to suggest that although we accept that house price changes can have macroeconomic implications, the RBNZ's mandate is focused on promoting financial stability, and therefore the policy proposals should be reframed to focus more clearly on reducing systemic risk rather than asset prices."

The comments appear to suggest the Reserve Bank is being warned that it may be overstepping its role over financial stability, a claim made in recent months by Michael Reddell, a senior adviser to the bank who was made redundant earlier this year.

Reddell said the Reserve Bank's own stress tests released in late 2014 showed the major trading banks could withstand a 50 per cent house price fall in Auckland and 13 per cent unemployment without breaching capital requirements. Some could even continue to pay dividends in that scenario.

Nevertheless the Reserve Bank had imposed lending restrictions requiring larger deposits on the ground that rising prices were a risk to financial stability, something Reddell claims the bank had not laid out an argument for.

"What they haven't done is make a compelling case that there's a threat to financial stability of the New Zealand financial system.

The central bank has one of the broadest mandates of any equivalent, setting the official cash rate (OCR) and overseeing the health of the financial system.

Thursday's release of documents show Treasury was concerned that the LVR restrictions had disadvantages first time buyers.

Treasury is concerned that the original LVR policy may have supported the increase in investor activity. The RBNZ note that some of the increase in the investor share is due to falling participation by first home buyers following the introduction of LVR restrictions, and note that the level of sales to investors is around 12 percent higher now than immediately prior to the introduction of LVR speed limits and has been strong recently," the Treasury document stated.

"We will be working with the RBNZ to unpick these concerns. The RBNZ do not examine the impact on first time buyers, apart from noting that banks are known to preference lending to owner occupiers, especially first home buyers, in allocating high-LVR lending within the existing national speed limit."