What is the DTI rule for mortgages in New Zealand?

Since July 2024, the Reserve Bank of New Zealand restricts how much of each bank's new lending can go to borrowers with a debt-to-income (DTI) ratio above 6 times gross annual income for owner-occupiers, or above 7 times for residential investors. Banks can still lend above this for a limited share of borrowers, but 6x (or 7x for investors) functions as the effective ceiling for most people.

How much deposit do I need to buy a house in NZ?

Most banks require at least a 20% deposit for owner-occupiers under standard LVR settings, though a portion of each bank's lending can go to borrowers with smaller deposits (down to around 10%). Investors generally need a larger deposit, often 30-35%. New-build properties are typically exempt from these LVR restrictions.

Do banks use my gross or net income to work out how much I can borrow?

Both. The RBNZ's debt-to-income limit is based on gross (before-tax) income. Separately, your bank will run its own serviceability (affordability) test using your net income, living expenses and other debts, usually stress-tested at an interest rate a few percent above current rates. You need to pass both tests.

Housing · Borrowing power

How much can I borrow?

Banks check three things: your debt-to-income ratio, your deposit (LVR), and whether you can actually afford the repayments. This calculator estimates all three so you can see which one is holding you back.

Buying as

Gross annual household income before tax, combined

Income earners

Dependants

Net monthly take-home pay estimated from your income — edit if you know the real figure

Other outstanding debt loans, hire purchase, etc

Credit card / overdraft limits even if paid off monthly

Other monthly debt repayments

Monthly living expenses excluding rent/mortgage

Expected property costs / month rates, insurance, body corp — optional

Deposit you have available

We've estimated your net pay from your gross income, assuming a 3.5% KiwiSaver rate and no student loan, split evenly across your earners. If your real take-home pay is different — a student loan, secondary tax code, or uneven income split — enter it directly, or check the take-home pay calculator for precision.

Estimate

Estimated borrowing power

Based on the most restrictive estimate below.

Plus your deposit of $0 ≈ $0 purchase price

DTI benchmark (6× income) $0

80% LVR benchmark $0

Estimated affordability (7.5% test rate, 30-year term)We use a 7.5% test rate to estimate affordability. Banks use their own servicing rates, expense assumptions and lending criteria — this is a simplified estimate, not a bank's actual test. $0

Real bank decisions also weigh credit history, employment and other factors on top of these three tests.

See repayments on this amount →

This calculation doesn't favour any lender. KiwiSums isn't owned by a bank or broker, and sponsored placements — if any — never change your result.

What this means for you

Fill in the fields above to see which limit controls your borrowing power and how a bigger deposit would change it.

Compare scenarios

See how a bigger deposit or paying down existing debt would shift your borrowing power.

Scenario	Max loan	Binding limit	Difference vs current
Current	$0	—	—
Bigger deposit (+$30k)	$0	—	$0
Less existing debt (−$10k)	$0	—	$0

"Binding limit" shows which of the three tests (DTI, deposit/LVR, or affordability) sets the ceiling for that scenario — reducing debt only helps if affordability is your binding limit.

Assumptions & sources

Data source

Reserve Bank of New Zealand debt-to-income and loan-to-value ratio restrictions; typical major-bank affordability stress-test rates.

Effective date

1 July 2026

Last reviewed

17 July 2026

Methodology

Takes the lowest of three limits: DTI (6x/7x gross income), LVR (deposit ÷ minimum deposit %), and serviceability (30-year loan at a stress-tested rate against your monthly surplus).

Included

DTI, LVR/deposit, and a standard affordability stress test.

Not included

Credit history, employment type and stability, existing bank relationship, and each bank's individual lending policy — all of which affect real approval decisions on top of these three tests.

The three limits explained

1. Debt-to-income (DTI)

Since 1 July 2024, the Reserve Bank restricts how much of each bank's lending can go to borrowers above a DTI of 6 (owner-occupiers) or 7 (investors) — where DTI is your total debt (including the new mortgage) divided by your gross annual income. Banks can still approve a small share of loans above this "speed limit," but 6x or 7x functions as the practical ceiling for most borrowers.

2. Loan-to-value ratio (LVR) / deposit

This is simply how much deposit you have relative to the purchase price. Standard settings expect at least 20% deposit for owner-occupiers and around 30-35% for investors, though banks can lend a portion of their books to borrowers below this. New-build properties are usually exempt from LVR restrictions, which is why many first-home buyers look at new builds with smaller deposits.

3. Serviceability (can you actually afford it?)

Banks don't lend at today's rate — they "stress test" your ability to pay at a higher rate (often around 1-2.5% above the advertised rate, commonly landing near 7-7.5% currently) to make sure you'd cope if rates rise. This calculator applies a 7.5% test rate to your monthly surplus after living costs and other debts.

Frequently asked questions

Since July 2024, the RBNZ restricts most bank lending above a DTI of 6x gross income for owner-occupiers, or 7x for investors. A small share of lending can go above this, but 6x/7x is the effective ceiling for most borrowers.

Standard settings expect at least 20% for owner-occupiers and 30-35% for investors, though some lending is available below this threshold. New builds are typically exempt from LVR restrictions.

Both. DTI limits use gross (before-tax) income. Separately, your bank tests affordability using your net income, expenses and other debts, usually stress-tested at a higher interest rate than you'd actually pay.

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