Debt-to-income (DTI) ratio rules in NZ, explained

Your debt-to-income (DTI) ratio is your total debt divided by your gross yearly income. Since 1 July 2024 the Reserve Bank has required most new owner-occupier lending to have a DTI of 6 or less, and most investor lending 7 or less; banks may lend above those ratios for up to 20% of their new lending of each type. Debt includes the new loan, other loans, student loans and the full limits of credit cards and overdrafts. On a $130,000 income that means total debt of up to $780,000 for most owner-occupier loans, or a new loan of $755,000 if you also have a $15,000 car loan and $10,000 of card limits. Banks decide; this is general information, not financial advice.

What a DTI ratio is

A DTI ratio compares everything you owe with what you earn. Kiwibank's guide puts it simply: "Your DTI ratio is calculated by dividing your total debt by your total gross income." Its own example: debt of $500,000 on an income of $80,000 is a DTI of 6.25.

The ratio is about the size of your debt, not your repayments. That makes it different from the bank's serviceability test, which looks at whether your monthly surplus could cover repayments at a test rate. The two can give quite different answers, and the lower one limits you. Our guide to how much you can borrow shows how they fit together.

The Reserve Bank DTI rules

The Reserve Bank reviewed the DTI settings in October 2025 ("We have also reviewed our DTI restrictions and decided to keep settings unchanged") and again in August 2026, and left them as they were. After the August 2026 review the next review of the Reserve Bank's lending settings was reported as planned in about 12 months, though it could come sooner.

These are speed limits on banks, not personal caps. A bank can still lend to you at a DTI above 6 if it has room in its 20% allowance and judges the loan affordable. Whether it does is the bank's decision, and it may depend on how much of its allowance it has already used. In practice, most borrowers should plan on staying within 6 (or 7).

We read these settings in news reports of the Reserve Bank's releases and in Kiwibank's guide; the Reserve Bank's own pages blocked our automated checks, so we recommend confirming on rbnz.govt.nz.

What counts as debt and income

Kiwibank's guide lists what goes into the sum:

• Debt: "existing home loans, personal debts (e.g. car loans), and student loans", plus "the limits of any credit cards and overdrafts, plus any new loans being considered".
• Income: total annual income before tax, including salary, rental income and other income.

The card rule is the one that surprises people. A credit card with a $10,000 limit and a zero balance counts as $10,000 of debt. So does an unused overdraft. Lowering or closing limits you do not need is one of the quickest ways to improve your DTI. Our guide to credit cards and borrowing covers this in more detail.

Student loans count at their balance, even though repayments come from your pay automatically. Buy now pay later and hire purchase are personal debts too; ask your bank how it treats each one.

Worked example: the DTI limit on $130,000

A couple earns $130,000 a year between them before tax. At a DTI of 6, their total debt can be up to $780,000 for most owner-occupier lending. How much of that is left for the home loan depends on what else they owe:

Every dollar of other debt, or card limit, takes a dollar off the room for the home loan. If the couple took a $700,000 home loan with the $15,000 car loan and $10,000 of cards, their DTI would be $725,000 ÷ $130,000 = 5.58, inside the limit.

The DTI limit is often not the one that binds. For this couple, with living costs of $3,200 a month and a $400 car loan repayment, serviceability at the 6.94% average test rate (test rates confirmed July 2026) comes to about $712,448, lower than $755,000. With lower living costs, DTI would bind first. Our DTI calculator works out your own ratio.

Total debt allowed at common incomes

The most total debt each income can carry within the thresholds, before anything comes off for existing debts:

These are ceilings for most lending, not what a bank will offer. Serviceability and your deposit can set a lower limit.

When DTI binds, and when it does not

DTI and serviceability measure different things, so which one limits you depends on your spending. Two versions of the same couple on $130,000, both with $10,000 of card limits, at the 6.94% average test rate (test rates confirmed July 2026):

The lean household could service almost $894,000 but is stopped at $770,000 by DTI. For it, closing the $10,000 of card limits is worth $10,000 of borrowing. The second household is limited by serviceability, so a lower card limit alone changes nothing in our estimate; paying off the car loan would lift its serviceability limit by about $60,000.

For couples and other joint buyers, the income side is the total gross income of everyone on the loan, and the debt side is everyone's debt combined. Our borrowing calculator shows both limits side by side.

Investors: 7 times, with rent in the income

Investors have a higher threshold of 7, and rental income counts in the income side of the ratio. Take an investor earning $180,000 who expects rent of $650 a week ($33,800 a year) from the property. For DTI, their income is $213,800, so 7 times is $1,496,600 of total debt; less $10,000 of card limits, the room for new borrowing is $1,486,600.

All their debt counts, including any existing home loan on the home they live in. Serviceability and the 30% investor deposit rule will often bind well before DTI. See our investor lending guide and the investor calculator.

Exemptions

When it announced the DTI rules in 2024, the Reserve Bank said "The main exemptions will be for newly constructed dwellings and Kāinga Ora loans" (as reported). Secondary sources also list refinancing, moving a loan to a new property (portability) and bridging finance. We could not confirm the current exemption wording on rbnz.govt.nz, so treat this list as reported, not confirmed.

For buyers this means:

• A Kāinga Ora First Home Loan is reported to be outside the DTI limit, though the lender still checks serviceability. See our First Home Loan guide.
• New builds are reported to be exempt; see new build lending.

An exemption from the Reserve Bank rule does not oblige a bank to lend more. Banks decide; this is general information, not financial advice.

Questions people ask

Does my credit card limit count towards DTI?

Yes. The full limits of credit cards and overdrafts count as debt, even if you owe nothing on them (Kiwibank's DTI guide). Reducing a $10,000 limit you do not use frees up $10,000 of room under the DTI limit.

Is the DTI limit 6 times my take-home pay?

No. It uses gross income, before tax, including rental and other income. Take-home pay matters for the separate serviceability test.

Can I borrow more than 6 times my income?

Possibly. Banks may make up to 20% of new owner-occupier lending at a DTI above 6. Whether they do so for you is their decision, and they still have to be satisfied you can afford the loan.

Does my student loan count?

Yes. Kiwibank's guide lists student loans as debt for the DTI ratio, alongside home loans, car loans and card limits.

When did the DTI rules start?

On 1 July 2024. The Reserve Bank kept the settings unchanged at its October 2025 and August 2026 reviews.