How much can I borrow for a home in NZ? The three limits

How much you can borrow for a home in New Zealand is roughly the lowest of three limits: what your monthly surplus could repay at the bank's test rate (6.85% to 7.10%, test rates confirmed July 2026), a total debt of 6 times your gross income for most owner-occupier lending (the Reserve Bank's DTI rule), and what your deposit supports (usually a 20% deposit, so a loan of 4 times the deposit). In our worked examples a single buyer on $80,000 could expect about $447,653, a couple on $130,000 about $770,000 and a couple on $200,000 about $600,000, each held back by a different limit. Banks decide; this is general information, not financial advice.

Three limits, and the lowest wins

No single rule decides how much a New Zealand bank will lend you. Each bank runs your application through three separate checks, and the smallest answer is the one that counts. Knowing which limit holds you back matters, because each one is fixed in a different way.

Our borrowing calculator works out all three from your figures and shows which one binds. The rest of this guide explains each limit, then runs three worked examples where a different limit holds the buyer back each time.

Limit 1: serviceability at the test rate

Serviceability is the bank's own affordability test. In outline:

1. Start with your take-home pay each month (after tax, ACC and KiwiSaver), plus a share of any rent you will receive. Banks usually count only part of rental or boarder income; we count 75% by default, in line with two secondary sources that put it at 70% to 80%.
2. Take off your living costs. Banks compare what you tell them with their own internal benchmarks, which they do not publish (BNZ says it may adjust your figures "after comparing with our internal benchmarks"). Our calculator uses the higher of your figure and a floor we set ourselves: $1,600 a month for the first adult, $800 for each other adult and $500 for each dependant. That floor is our assumption, not a bank figure.
3. Take off repayments on other debts, such as car loans and personal loans.
4. What is left is your monthly surplus. The bank asks how big a loan that surplus could repay at its test rate, usually over 30 years.

The test rate is the key number. Test rates confirmed in July 2026 were ANZ 6.85%, ASB 6.85%, BNZ 7.10%, Kiwibank 6.95% and Westpac 6.95%, an average of 6.94%. That is well above the average advertised one-year fixed rate of 5.06% (rates as at 10 November 2026). Banks test at the higher rate so a borrower can still cope if rates rise. Our guide to bank test rates has the dated table.

At 6.94% over 30 years, every $100 of monthly surplus supports about $15,122 of loan. That is why a $400 car loan repayment, or $400 more in living costs, can cut borrowing by around $60,000.

Limit 2: debt-to-income (DTI)

Since 1 July 2024 the Reserve Bank has limited how much banks can lend at a high debt-to-income ratio. Most new owner-occupier lending must keep total debt at or below 6 times gross income, and most investor lending at or below 7 times. Banks may lend above those ratios for up to 20% of their new lending of each type. The Reserve Bank left these settings unchanged at its October 2025 and August 2026 reviews.

Two details catch people out. First, income is before tax and includes rental income. Second, debt includes your new home loan, any other home loans, car and personal loans, student loans and the full limits of your credit cards and overdrafts, even if you owe nothing on them (Kiwibank's guide to DTI sets this out).

So the DTI limit on your new loan is 6 times your gross income, less the debt you already have. On a $130,000 income that is $780,000 of total debt, or $770,000 of new loan if you keep $10,000 of card limits. See our debt-to-income guide and the DTI calculator.

Limit 3: your deposit (LVR)

The loan-to-value ratio (LVR) is the loan as a share of the property's value. Since 1 December 2025, banks may make up to 25% of new owner-occupier lending at an LVR above 80% (a deposit under 20%), and up to 10% of new investor lending above 70% (a deposit under 30%). The Reserve Bank kept these settings at its August 2026 review.

For standard lending, then, a deposit supports a loan of up to 4 times the deposit (80 ÷ 20), so the most you could pay is 5 times the deposit. A $150,000 deposit supports a loan of $600,000 and a price of $750,000.

There are ways round the 20% rule, each with a cost or a catch: a bank's low-deposit allowance (usually with a low equity premium), a Kāinga Ora First Home Loan with 5% (which has income caps and a premium), or a new build (reported to be exempt). Our LVR guide and low deposit guide cover them, and the deposit calculator does the sums.

Worked example: three incomes, three different limits

Here are three households run through our engine at the average July 2026 test rate of 6.94% over 30 years. Take-home pay is worked out with 2026/27 PAYE rates, the ACC levy and KiwiSaver at 3.5%, with no student loan. None has a car loan, to keep the examples simple.

Household A is held back by serviceability. Its DTI and deposit limits are both higher, so the only levers are spare income: lower living costs, more income, or a cheaper home. At the individual banks' test rates its serviceability limit runs from $440,489 at BNZ (7.10%) to $451,765 at ANZ and ASB (6.85%), a spread of about $11,000 from the test rate alone.

Household B has modest living costs (exactly our floor for two adults), so its surplus would support almost $894,000. The DTI rule stops it at $770,000: 6 times $130,000 is $780,000, less the $10,000 of card limits. Cancelling the cards would lift the DTI limit to $780,000. A bank could lend above the DTI limit only within its 20% allowance, which is the bank's call, not the buyer's.

Household C has a high income but a $150,000 deposit, so the 20% deposit rule binds at $600,000. If a bank lent it 90% inside its low-deposit allowance, the deposit limit would rise to $1,350,000 and serviceability would bind instead, at $1,130,977, though a low equity premium would usually apply.

What changes the answer most

• Living costs. Each $100 a month of spending the bank counts takes about $15,000 off the serviceability limit at 6.94%. Banks look at recent bank statements, so the figure needs to be real.
• Other debts. A loan repayment reduces your surplus, and its balance counts towards DTI. A card limit counts towards DTI at its full value.
• Children. Dependants raise living costs, which lowers the serviceability limit. Our floor adds $500 a month for each.
• The bank. Test rates differ by a quarter of a percentage point, and each bank's living-cost benchmarks are different and unpublished.
• Rental or boarder income. Banks usually count only part of it. A boarder paying $200 a week adds $7,800 a year at our 75% default, about $98,000 of borrowing at the average test rate. Our rental income guide explains.
• Self-employment. Banks usually want more history for variable income; see our self-employed guide.

Remember that the bank's figure is a maximum, not a target. A loan that passes at a 6.94% test rate still has to fit your budget alongside rates, insurance and maintenance. Our guide to how much house you can afford looks at that side.

What our estimate cannot know

Our calculator follows the published rules and the published test rates, but a bank sees far more than we do. It can lend less than our estimate (if its living-cost benchmark for your household is higher than our floor, or if your credit history raises questions) or, within its speed limits, more. Test rates were confirmed in July 2026; banks may have moved them since. The 30-year test term comes from secondary sources only.

A pre-approval from a bank or a mortgage adviser is the only way to know what a lender will actually offer you. Banks decide; this is general information, not financial advice.

Questions people ask

How much can I borrow on $100,000 a year?

It depends on your living costs, debts and deposit. The DTI rule caps most owner-occupier lending at total debt of 6 times income, so $600,000 of total debt on $100,000, less any other loans and card limits. Serviceability and your deposit may set a lower figure. Try the calculator with your own numbers.

Is it 5 times or 6 times my income?

The Reserve Bank's DTI threshold for owner-occupiers is 6 times gross income (7 times for investors), and banks may lend above it for up to 20% of new lending. Many borrowers are limited earlier by serviceability at the test rate, so 6 times is a ceiling, not a promise.

Why does the bank use a higher rate than the one I will pay?

Banks test whether you could still afford the loan if rates rose. Test rates confirmed in July 2026 were 6.85% to 7.10%, against an average advertised one-year rate of 5.06% (rates as at 10 November 2026).

Do two incomes mean double the borrowing?

Not quite. Two incomes double the DTI limit, but living costs for two adults are higher than for one, so the serviceability limit rises by less. In our examples a single buyer on $80,000 could borrow about $447,653 and a couple on $65,000 each about $770,000.