What is a good debt-to-income ratio in NZ?

There is no single good number, but the Reserve Bank's rules make 6 the practical ceiling for most home buyers and 7 for most investors. Lower ratios leave more room in your budget if rates rise.

When did DTI restrictions start in NZ?

1 July 2024. The Reserve Bank reviewed them in 2025 and kept the settings unchanged.

Does a student loan count in my DTI?

Banks treat student loans differently. Even where the balance is not counted as debt, the compulsory repayments reduce the income you have to service a mortgage.

Can I borrow more than 6 times my income?

Sometimes. Banks can still make 20 percent of their new owner-occupier lending above a DTI of 6, and new builds and First Home Loans are exempt. Those loans are rationed, so expect more questions.

Debt-to-income ratio in NZ: how the DTI rules work

Updated 2026-10-19

Your debt-to-income ratio is your total debt divided by your gross annual income. Since 1 July 2024, the Reserve Bank allows each bank to make only 20 percent of its new owner-occupier lending at a DTI above 6, and 20 percent of new investor lending at a DTI above 7. So most borrowers are limited to about six times their income, or seven if they are investing.

How do you calculate your DTI?

Add up all your debt, including the new mortgage, and divide by your total income before tax. A household earning $150,000 a year with a $780,000 mortgage and no other debt has a DTI of 5.2. Borrowing $950,000 on the same income would be a DTI of about 6.3, above the owner-occupier line.

Debt includes the new loan, any existing mortgages, car loans, personal loans, and the limits on credit cards and overdrafts.
Income is gross: salary and wages before tax, plus other regular income the bank accepts, such as rent from a property.
It is a household calculation when you borrow jointly: everyone's debt over everyone's income.

Is DTI the same as how much a bank will lend?

No. The DTI limit is a ceiling on how much of that kind of lending a bank can do. Each bank also tests whether you can afford repayments at a higher test interest rate after your living costs. For many borrowers that serviceability test bites first, and they cannot borrow six times their income anyway.

The how much can I borrow calculator runs a serviceability-style test on your own figures, so you can see which limit is likely to apply to you.

What is exempt from the DTI rules?

The Reserve Bank publishes the full list of exemptions. Whether your loan qualifies is the bank's call.

Lending for new builds, including buying a newly built home.
Kāinga Ora First Home Loans.
Refinancing an existing loan without increasing it.
Some bridging finance and remediation lending, such as fixing a leaky or quake-prone home.

How can you lower your DTI?

Reduce or close other debt, including credit card limits you do not use.
Borrow less, with a larger deposit.
Add an income, by borrowing with a partner, if that suits your situation.
Look at a new build, which is exempt.

Common questions

What is a good debt-to-income ratio in NZ?: There is no single good number, but the Reserve Bank's rules make 6 the practical ceiling for most home buyers and 7 for most investors. Lower ratios leave more room in your budget if rates rise.
When did DTI restrictions start in NZ?: 1 July 2024. The Reserve Bank reviewed them in 2025 and kept the settings unchanged.
Does a student loan count in my DTI?: Banks treat student loans differently. Even where the balance is not counted as debt, the compulsory repayments reduce the income you have to service a mortgage.
Can I borrow more than 6 times my income?: Sometimes. Banks can still make 20 percent of their new owner-occupier lending above a DTI of 6, and new builds and First Home Loans are exempt. Those loans are rationed, so expect more questions.

Run your own numbers

Sources

General information about how New Zealand home loans work, not financial advice. We are not a mortgage broker. What this site is and is not.