How Much Can I Borrow NZ

Ask anyone house hunting in New Zealand what keeps them up at night and it is rarely the houses. It is the number. How much will a bank actually lend you? Online calculators spit out an answer in seconds, but the figure a lender approves is built differently. It has to survive three separate tests at once: the Reserve Bank’s lending guardrails, the lender’s own affordability assessment, and the size of your deposit.

This guide works through each test using the rules as they stand in October 2026, runs the maths on three example households, and shows which test binds for each. The examples are illustrations, not promises. Every lender applies the rules through its own criteria, and the only number that matters is the one on your own approval.

The quick answer

There is no official borrowing limit and no single income multiple that applies to everyone. In practice, your maximum loan is the lowest of three figures:

• The deposit test. Owner-occupiers who put down less than 20 percent fall into restricted high-LVR lending, which banks can only supply in limited amounts. Investors face a tighter line at 30 percent.
• The DTI test. Total debt above six times your gross income (seven times for investors) is classed as high-DTI lending, again rationed for banks.
• The affordability test. The lender must be satisfied you can repay without substantial hardship. It tests repayments at an interest rate higher than the one you will actually pay, then sets that against your income and living costs.

Most buyers are stopped by the first test or the third one, not the DTI cap. The worked examples below show how that plays out.

Why there is no single income multiplier

Plenty of websites will tell you that you can borrow “five or six times your income”. That idea comes from the Reserve Bank’s DTI threshold, but it misreads it. Six times income is not an entitlement or a promise. It is the point where lending becomes restricted for banks as a group.

The DTI rules are speed limits on a bank’s whole loan book, not a personal cap on you. A bank may write some loans above the line, just not many. Whether yours is one of them depends on the bank’s remaining room, your deposit, and how the rest of your application looks. Two households on identical incomes routinely get different answers because one carries a car loan and three children while the other has no debts and a large deposit. Treat any multiplier as the outer fence. The real answer almost always sits inside it.

Guardrail one: LVR restrictions and your deposit

Your LVR is your loan divided by the property’s value. Borrow $480,000 against a $600,000 home and your LVR is 80 percent. The Reserve Bank restricts how much high-LVR lending banks can do. The current settings have been in place since 1 December 2025, and the Reserve Bank confirmed in its August 2026 annual review that they stay as they are:

• Owner-occupiers: no more than 25 percent of a bank’s new lending can have an LVR above 80 percent. In plain terms, most owner-occupiers need at least 20 percent down, and smaller deposits come out of a limited quota.
• Investors: no more than 10 percent of a bank’s new investor lending can have an LVR above 70 percent. Most investors therefore need 30 percent down.

The limits are measured across a bank’s new lending over a rolling period, which is why one bank might say yes to a 10 percent deposit in March and no in June. Nothing about your finances changed. The bank’s quota did.

Some lending sits outside the LVR rules altogether: Kāinga Ora loans including First Home Loans, construction loans and new homes bought from the developer within six months of completion, refinancing where the loan does not increase, bridging finance, and lending to fix a property problem such as a leaky home. The new-build exemption is one reason lenders can offer smaller deposits on newly built homes. The restrictions apply only to new lending, so an existing loan breaches nothing if prices fall and your LVR drifts up. Top it up past the threshold, though, and the top-up counts.

Guardrail two: DTI restrictions and your total debt

DTI restrictions have applied since 1 July 2024. Your DTI ratio is your total debt divided by your gross (before tax) income. Earn $100,000 and owe $600,000 across all your debts, and your DTI is 6.

Borrowing counts as high-DTI when it goes over:

• 6 times gross income for owner-occupiers
• 7 times gross income for investors

Banks can put up to 20 percent of new owner-occupier lending above the 6 line, and up to 20 percent of new investor lending above the 7 line. The Reserve Bank’s maths is worth learning, because it frames every example in this guide:

Maximum borrowing before you cross into high-DTI = (threshold × gross income) − existing debt

What counts as debt is broader than most people expect:

• Your existing mortgage and any other property debt
• Student loans and car loans
• Credit card limits, not balances. A $10,000 limit counts as $10,000 of debt even at a zero balance
• Overdraft limits

Rental income counts towards income for investors. There are quirks at the edges: business loans are not included in the DTI debt calculation, and the Reserve Bank’s examples treat an interest-free family loan, one needing no repayment until you sell, as outside the debt figure too. The exemptions mirror the LVR rules, including First Home Loans and new builds. The DTI rules bind registered banks; non-bank lenders sit outside them, although the responsible lending law below still applies to every lender.

How lenders assess you: the affordability test

Sitting on top of both guardrails is the assessment that decides most applications. Under the lender responsibility principles in the Credit Contracts and Consumer Finance Act (CCCFA), a lender must make reasonable inquiries and be satisfied it is likely you can make the repayments without suffering substantial hardship. Consumer Protection puts it plainly: the lender must check your income and expenses before it lends. MBIE’s Responsible Lending Code guides how, including making sure income covers expenses, the new loan included, with room for error.

Income. Salary and wages are the easy part. If your income moves around, expect the lender to look backwards rather than take your best year: the Reserve Bank’s guidance assesses a self-employed borrower on her average wages over recent years, because that is what the bank could rely on. A student loan takes repayments straight out of your pay before the lender does its sums.

Expenses. Lenders work through your living costs: food, housing, transport, childcare, insurance, rates and the rest, comparing what you declare with your bank statements and with benchmark living costs that rise with household size. This is where applications quietly shrink: a household can pass the DTI test and still be offered less than it hoped because assessed expenses leave too little surplus.

Debts. Everything you owe is loaded in, including those credit card limits. The lender also pulls your credit history, which is why your credit score in NZ is worth checking before you apply rather than after a decline.

The test rate. The lender does not test your repayments at the advertised interest rate. It uses a higher test rate of its own, so a rise in rates does not immediately push you under. Each bank sets its own and none has to publish it. The Reserve Bank looked at forcing a floor under test rates when it designed the DTI rules and chose DTI restrictions instead, so the buffer stays each bank’s own call. You are assessed as if your loan cost more than it will. That gap often decides your limit.

Your deposit changes the answer twice

A bigger deposit helps twice over: it lowers your LVR, moving you out of restricted lending territory, and it shrinks the loan itself, which helps the DTI ratio and the affordability assessment. Watch what a deposit does to the price you can reach:

• A $120,000 deposit is 20 percent of a $600,000 home for an owner-occupier, supporting a $480,000 loan at exactly 80 percent LVR.
• The same $120,000 is 30 percent of a $400,000 rental for an investor, supporting a $280,000 loan at 70 percent LVR.
• A $30,000 deposit is 5 percent of a $600,000 home. Out of reach under standard lending, but exactly what a Kāinga Ora First Home Loan is built around. First Home Loans are issued by selected lenders, underwritten by Kāinga Ora, sit outside the LVR and DTI restrictions, and have income caps. They carry a cost: a lender’s mortgage insurance premium, listed at 1.2 percent of the loan amount by Unity, one of the participating lenders.

Deposits are usually a mix of savings, a KiwiSaver first-home withdrawal if you qualify, and sometimes a gift from family. Be upfront if family money has to be repaid: it is debt in the lender’s eyes, whatever the family calls it.

Worked examples

The three households below are fictional and the figures are illustrative only. Each runs the same three checks: the DTI ceiling, the deposit and LVR position, and repayments at a test rate. We use 7.50 percent a year over a 30-year term, roughly $699 a month per $100,000 borrowed: deliberately cautious, and well above the advertised rates lenders are currently offering (see our guide to Home Loan Rates NZ). Your lender will use its own test rate and expense figures, so treat the results as an explanation of the machinery, not an estimate of your approval.

Example 1: A couple buying together, combined income $160,000

Two incomes of $88,000 and $72,000, credit cards with combined limits of $10,000, no other debt, and a $160,000 deposit. They are looking at homes around $800,000.

• DTI check: 6 × $160,000 = $960,000. Less the $10,000 of card limits, they could borrow up to $950,000 before their lending counted as high-DTI.
• Deposit check: An $800,000 purchase with $160,000 down means a $640,000 loan at exactly 80 percent LVR. No quota needed.
• Test rate check: Repayments on $640,000 at 7.50 percent over 30 years come to about $4,475 a month. Their DTI at that loan is 4.1.

What binds: neither Reserve Bank guardrail. This couple’s limit will be set by the affordability assessment, in particular their living expenses and whether they have children.

Example 2: A single first-home buyer on $95,000

One income of $95,000. A student loan balance of $18,000 and a credit card with a $5,000 limit. The deposit is $60,000, built from savings and a KiwiSaver withdrawal.

• DTI check: 6 × $95,000 = $570,000. Less $23,000 of existing debt (the student loan plus the full card limit), the ceiling before high-DTI is $547,000.
• Deposit check: At 80 percent LVR, $60,000 only supports a $300,000 property and a $240,000 loan. Realistically this buyer is looking closer to $560,000: a $500,000 loan at about 89 percent LVR.
• Test rate check: Repayments on $500,000 at 7.50 percent come to about $3,496 a month. The DTI would be 5.5, under the threshold, but student loan repayments come out of take-home pay first, which tightens the affordability sums.

What binds: the deposit. A loan at 89 percent LVR needs room in the bank’s high-LVR quota, or a First Home Loan if this buyer meets the income caps. The DTI cap never gets a say.

Example 3: An investor with an existing mortgage

A salary of $130,000 and a $420,000 mortgage on the home they live in. They want a $650,000 rental expected to return $600 a week in rent, or $31,200 a year.

• DTI check: Rental income counts, following the Reserve Bank’s approach. Assessed income is $130,000 + $31,200 = $161,200, so the investor threshold allows total debt of 7 × $161,200 = $1,128,400. Less the existing $420,000 mortgage, headroom is $708,400.
• Deposit check: Staying at or under 70 percent LVR needs a 30 percent deposit: $195,000. The new loan is $455,000.
• Test rate check: Repayments on $455,000 at 7.50 percent come to about $3,181 a month, against rent of about $2,600 a month. The gap has to be covered from salary, and if the lender counts less than the full rent, the headroom shrinks further. Total debt after buying would be $875,000, a DTI of about 5.4.

What binds: the deposit again, this time the 30 percent an investor needs for standard LVR settings. The income is there. The cash deposit is the hard part.

How to increase what you can borrow

• Cut the debts that count. Pay down loans, and reduce or close credit card limits you do not use. Because limits count in full, dropping a $10,000 limit to $2,000 frees up $8,000 of DTI room and improves the affordability assessment too.
• Grow the deposit. Every extra dollar lowers your LVR and the loan you need. Crossing from just above 80 percent LVR to just below it moves you out of quota lending entirely.
• Make your income easy to count. A stable employment history, and tidy records if you are self-employed, mean the lender assesses the income you actually earn rather than a cautious version of it.
• Watch the spending the lender will see. Lenders read bank statements when they estimate expenses. Spending that matches the budget you describe makes the assessment smoother.
• Look at the exempt routes. A new build sits outside the LVR rules, and a First Home Loan needs only a 5 percent deposit if you qualify. Both still face the affordability test.
• Get a pre-approval. It turns all of this theory into your actual number, and tells you which test is binding for you.

Mistakes that reduce what you are offered

• Keeping big credit card limits “just in case”. The full limit counts against you even at a zero balance.
• Buying a car on finance just before applying. The new debt hits your DTI ratio and your monthly expenses at the worst possible moment.
• Forgetting the student loan. It counts as debt for DTI purposes, and its repayments reduce the income the lender can work with.
• Assuming 20 percent works for a rental. Investor lending turns on the 70 percent LVR line, so standard lending means 30 percent down.
• Maxing out at today’s interest rate. If you could only just afford repayments at the advertised rate, the test rate will stop the application. That is the system working as intended.

Frequently asked questions

How many times my income can I borrow in NZ?
There is no fixed multiple. For owner-occupiers, total debt over six times gross income is classed as high-DTI and banks can only put 20 percent of new lending above that line. Many borrowers are approved for less, because the deposit rules or the affordability assessment bind first. Investors work to a seven times threshold.

What deposit do I need for a home loan in NZ?
Most owner-occupiers need 20 percent for standard lending. Smaller deposits are rationed by the LVR speed limits. Investors generally need 30 percent. Eligible first-home buyers can use a First Home Loan with 5 percent, and new builds are exempt from the LVR restrictions.

Do credit card limits count if I owe nothing?
Yes. For the DTI calculation the Reserve Bank counts the limit, not the balance, and lenders do the same in their affordability assessments.

Does a student loan reduce how much I can borrow?
Yes, twice over. The balance counts towards your total debt in the DTI ratio, and the repayments reduce your take-home pay, which is what the affordability assessment works from.

Are the rules the same at non-bank lenders?
Not quite. The LVR and DTI restrictions apply to registered banks, so non-bank lenders sit outside them. But every lender providing consumer credit must comply with the CCCFA’s responsible lending principles, so a non-bank lender still has to check you can afford the loan.

What interest rate do banks use to test affordability?
Their own test rate, set above the advertised rate, and they do not have to publish it. That is why nobody can tell you exactly how much you can borrow without running your full application. The 7.50 percent used above is an illustration, not a bank’s figure.

Sources

• Reserve Bank of New Zealand, Loan-to-value ratio restrictions (current limits, exemptions, how speed limits work): https://www.rbnz.govt.nz/faqs/loan-to-value-ratio-restrictions-faqs
• Reserve Bank of New Zealand, Understanding debt-to-income (DTI) restrictions (thresholds, speed limits, what counts as debt and income): https://www.rbnz.govt.nz/education/explainers/dti
• Reserve Bank of New Zealand, Reserve Bank maintains Loan-to-Value Ratio (LVR) settings, August 2026: https://www.rbnz.govt.nz/news-and-events/news/2026/08/reserve-bank-maintains-loan-to-value-ratio-settings
• Reserve Bank of New Zealand, Macroprudential tools (DTI restrictions activated 1 July 2024): https://www.rbnz.govt.nz/regulation-and-supervision/oversight-of-banks/standards-and-requirements-for-banks/macroprudential-policy/macroprudential-tools
• Consumer Protection (MBIE), What lenders must do: https://www.consumerprotection.govt.nz/help-product-service/borrowing-money/what-lenders-must-do
• Commerce Commission, Commission alleges irresponsible lending by Pretty Penny (background: lender responsibility principles under the CCCFA): https://www.comcom.govt.nz/news-and-media/news-and-events/2019/commission-alleges-irresponsible-lending-by-pretty-penny/
• MBIE, Responsible Lending Code, July 2024: https://www.mbie.govt.nz/assets/responsible-lending-code-july-2024.pdf
• Kāinga Ora, First Home Loan (5 percent deposit, underwritten by Kāinga Ora; page updated 9 July 2026): https://kaingaora.govt.nz/home-ownership/first-home-loan/

A final word

General information only: this article explains how borrowing limits work in New Zealand and is not financial advice. LVR and DTI settings are set by the Reserve Bank and can change, lenders apply their own criteria on top, and only a lender can tell you how much it will lend you. For advice on your own situation, talk to your bank or a licensed financial adviser. More guides like this one are in our Finance, Tax & Money hub.