Investor lending rules in NZ: 30% deposit, DTI 7 and rent

Buying a rental in New Zealand has its own rules. The Reserve Bank lets banks make only 10% of new investor lending above a 70% loan-to-value ratio, so most investors need a 30% deposit. Under the debt-to-income rule, most investor lending must keep total debt at or below 7 times gross income, with up to 20% of new investor lending allowed above that. Banks count only part of the expected rent in their affordability test (two secondary sources say 70% to 80%), and from 1 April 2025 IRD lets you claim 100% of the interest on a residential rental. In our worked example, a household on $180,000 with $300,000 to put down could borrow about $700,000 for a $1,000,000 rental, and the deposit is what binds. Banks decide; this is general information, not financial advice.

The rules at a glance

The LVR and DTI settings come from the Reserve Bank, as reported by interest.co.nz and MPA after its August 2026 review, when it kept them unchanged, and its October 2025 release that eased the LVR speed limits from 1 December 2025. The rbnz.govt.nz site blocked our automated reading, so we could not check the official text directly. The next review is “planned in about 12 months time” from August 2026, but could come sooner.

The speed limits apply to each bank’s lending as a whole, not to you. A bank can still lend to some investors with less than 30%, but with only 10% of its investor lending allowed above 70%, it has to ration those loans. Our LVR and deposit rules guide and DTI guide explain each rule.

The 30% deposit

At 70% LVR, the deposit must be 30% of the value. The largest loan a deposit supports is deposit x 0.7 / 0.3, so every $3 of deposit supports $7 of loan.

Some investors use equity in a home they already own rather than cash. How a bank treats that equity is a bank-by-bank matter we cannot set out in general, so ask your bank or an adviser. New builds are treated differently: the research we rely on says new builds are exempt from the LVR restrictions, though we could not confirm the current wording on rbnz.govt.nz. See our new-build lending guide.

DTI of 7, and how rent is counted

For DTI, Kiwibank says income is your total gross income before tax, including salary and rental income, and debt includes all home loans, personal and student loans, and the limits of credit cards and overdrafts. So the rent from the property you are buying counts in full as income for DTI, and any existing mortgage counts in full as debt.

For serviceability (can you afford the repayments at the bank’s test rate?), banks count only part of the rent, to allow for vacancies, rates, insurance and maintenance. Our research found two secondary sources that agree on roughly 70% to 80%: Sorted says some lenders count 70% to 80% of rent from boarders or flatmates, and calculate.co.nz says rental income is often discounted by 20% to 30%. A report that BNZ shades investment rent by about 30% comes from one secondary source (UNVERIFIED). We use 75% by default and let you change it. The full detail is in our rental income guide.

Worked example: a household buying a rental

These are the investor defaults on our investor calculator: a household earning $180,000 a year before tax, taking home $11,200 a month, with living costs of $3,800 a month, $10,000 of card limits, no other debt, and $300,000 to put down. The rental is expected to earn $650 a week ($33,800 a year); we count 75% of it, $25,350 a year, for serviceability. To keep it simple there is no existing home loan; if there were, its balance would count for DTI and its repayments would reduce serviceability.

The estimated loan is $700,000, for a price of about $1,000,000, and the debt-to-income ratio afterwards is 3.32. At each bank’s published test rate the serviceability limit ranges from $1,415,483 (BNZ, 7.10%) to $1,451,716 (ANZ and ASB, 6.85%), with Kiwibank and Westpac at $1,437,047 (6.95%), but the deposit still binds at every bank.

Compare the same household buying a home to live in, with no rent: serviceability falls to $1,119,046, the DTI limit becomes 6 x $180,000 less $10,000 = $1,070,000, and that binds instead. With the 20% owner-occupier deposit rule, $300,000 would support up to $1,200,000. So for investors the 30% deposit rule usually bites first, while for owner-occupiers on similar incomes it is often DTI. These estimates use our living-cost assumptions, not bank figures; banks use their own.

Interest deductibility from 1 April 2025

IRD’s residential property interest page says: “From 1 April 2025 you can claim 100% of the interest you incur.” For the year from 1 April 2024 to 31 March 2025, “You can claim 80% of the interest you incurred.” The page was last updated on 1 April 2026. For earlier years, IRD says the timing of the borrowing decides what you can claim, and it has a separate page for past years.

This is a tax rule, not a lending rule. Banks test whether you can afford the loan before tax, so deductibility does not feed directly into the serviceability test we model. It does change the after-tax cost of holding a rental, which matters for your own sums. Talk to an accountant or tax adviser about your situation; tax on rental income is outside what this site calculates.

Practical points for investors

• Test rates matter more on bigger loans. The five banks’ test rates, confirmed July 2026, are ANZ 6.85%, ASB 6.85%, BNZ 7.10%, Kiwibank 6.95% and Westpac 6.95%. See bank test rates.
• Existing debt adds up fast. Your home loan counts for DTI. A household with a large home loan can find DTI binds before the deposit does.
• Rent evidence. BNZ asks investment property applicants for a copy of the existing tenancy agreement or a rental appraisal from a local REINZ real estate agency.
• Advisers and banks. Investor policy varies by bank more than first-home lending does; our advisers vs banks guide covers both routes.

Rates as at 10 November 2026; test rates confirmed July 2026.

Questions people ask

How much deposit do I need for an investment property in NZ?

Usually 30%. The Reserve Bank lets banks make only 10% of new investor lending above 70% LVR (since 1 December 2025), so most investors need a 30% deposit or equivalent equity.

What is the DTI limit for investors?

Total debt above 7 times gross income is high DTI for investors, and banks may make up to 20% of new investor lending above that. Rental income counts as income, and all your debts, including card limits, count as debt.

How much of the rent do banks count?

For affordability, two secondary sources say roughly 70% to 80%. We use 75% by default. For the DTI rule, Kiwibank says rental income counts as part of gross income.

Can I claim all the interest on a rental property?

IRD says you can claim 100% of the interest you incur from 1 April 2025, and 80% for 1 April 2024 to 31 March 2025. Get tax advice for your situation.