How Much Can I Borrow in NZ? DTI Rules Fully Explained — 2026

Since July 2024, New Zealand has had Debt-to-Income (DTI) ratio restrictions on mortgage lending. This fundamentally changes how banks calculate how much you can borrow. Here's exactly how it works in 2026 — and how to maximise your borrowing power within the rules.

What Is a Debt-to-Income Ratio?

A Debt-to-Income (DTI) ratio compares your total debt to your gross annual income. If you earn $100,000 per year and have $500,000 in total mortgage debt, your DTI is 5×.

The 2026 DTI Caps in NZ

Borrower type	DTI cap	Example: $100k income
Owner-occupier	6×	Max total debt $600,000
Investor	7×	Max total debt $700,000
New build — any	Exempt	No DTI limit applies

These are hard caps — lenders must ensure at least 80% of their new lending stays within these limits. In practice, most lenders apply them to all new lending except where explicit exceptions exist (like new builds).

What Counts as Income and Debt?

Income that counts:

• Gross salary (before tax)
• Partner or co-borrower gross salary
• Rental income — typically 70–80% of gross rent
• Regular bonuses and allowances (with history)
• Self-employed business income (2-year average)

Debt that counts:

• The new mortgage you're applying for
• All existing mortgages
• Credit cards (typically counted at full limit, not balance)
• Car loans and personal loans
• Student loans (counted in some lenders' assessments)

How to Maximise Your Borrowing Power

1. Include all income — Make sure all regular income sources are documented. Many people forget to include overtime, allowances, or income from a side business.
2. Close unused credit cards — A $10,000 credit card limit can reduce your borrowing by $30,000–$50,000 in some lender assessments.
3. Pay down debts — Every dollar of existing debt reduces your available DTI headroom. Paying off a $20,000 car loan on $100k income frees up $120,000 of borrowing capacity (at 6× DTI).
4. Consider a new build — New builds are exempt from DTI caps entirely. If you're close to the limit, a new build may let you borrow what you need.
5. Use a mortgage adviser — Different lenders apply DTI calculations slightly differently. Jagdip knows which lenders are most generous for your specific situation.

Why New Builds Are the Exception

New builds are explicitly exempt from the RBNZ's DTI restrictions. This means if you're buying a new build, the 6× cap doesn't apply — lenders can lend based on their own serviceability tests.

In practice, this means buyers who can't get their target loan amount under standard DTI rules can often achieve it by buying new. Jagdip works with buyers in this situation every week.

Scenario	Existing home	New build
$90k income, want to borrow $700k	✗ Exceeds 6× DTI cap ($540k max)	✓ Possible — no DTI cap
First home buyer, 10% deposit	Standard LVR lending	✓ LVR restriction also lifted