Mortgage · 2 July 2026
Most calculators give you one number. The real answer is the lowest of three separate limits, and knowing which one is holding you back is where the money is.
In New Zealand, how much you can borrow for a mortgage is set by the lowest of three limits: your deposit (which fixes your loan-to-value ratio), the debt-to-income ratio (generally around six times gross income for owner-occupiers), and the bank's servicing test (can you repay at a higher test rate after real living costs and other debts). Whichever of the three is smallest becomes your ceiling, and it can differ from one bank to the next.
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Ask "how much can I borrow" and a calculator will hand back a single figure. In practice a lender applies three separate tests, and you have to pass all of them. Your borrowing power is capped by whichever comes out lowest.
The loan-to-value ratio compares your loan to the property's value. Owner-occupiers generally need around a 20% deposit and investors more (Source: RBNZ). Banks have only limited room to lend to buyers with smaller deposits, so your deposit often sets a hard ceiling on the property price you can reach.
DTI compares your total debt to your gross income. For owner-occupiers the ratio is generally around six, and for investors around seven (Source: RBNZ). All debt counts, including the new mortgage, car and personal loans, and credit card limits.
The bank checks you can afford repayments at a test rate set higher than the advertised rate, after your real living costs and existing debts (Source: BNZ). For many buyers this is the tightest of the three, and it is the one calculators tend to miss.
You could clear the deposit and DTI tests comfortably and still be capped by servicing, or vice versa. Working out which limit is actually holding you back is the first step, because the fix is different for each one.
The debt-to-income rules give a useful starting point. Because owner-occupier lending is generally capped at around six times gross household income (Source: RBNZ), you can work backwards from your income to a rough total-debt ceiling. Remember this is a ceiling on DTI alone, before the deposit and servicing tests are applied.
These are illustrative, not a quote. Your actual figure depends on existing debts, dependants, living costs, and the servicing test rate the specific bank uses. Two households on the same income can end up with very different numbers once those are counted. It is also worth checking your deposit and DTI positions together, which our LVR & DTI calculator is built for.
The deposit and DTI rules are broadly common across banks because they come from the Reserve Bank. The servicing test is where banks differ, and where a broker earns their keep. Each lender sets its own:
The upshot is that the same household can be offered materially different amounts depending on where they apply. If most of your income is base salary, the differences are usually modest. If you earn variable income, are self-employed, or rely on rental income, they can be large. This is why comparing across the market, rather than walking into a single bank, tends to matter most for people whose income is not a flat salary.
Once you know which of the three limits is binding, the levers become clear. General options people use include:
Your limit is the lowest of three ceilings: your deposit (loan-to-value ratio), the debt-to-income limit (generally around six times gross income for owner-occupiers), and the bank's servicing test at a higher test rate. The smallest of the three is your real number, and it varies between banks.
As a rough guide, the DTI rules cap owner-occupier debt at around six times gross household income (Source: RBNZ). So a $150,000 income might sit near a $900,000 total-debt ceiling on DTI alone. Your real figure can be lower once living costs, other loans, and the test rate are counted.
Yes. Most banks assess your full card and overdraft limits, not the current balance, because you could draw the whole limit at any time. A $10,000 limit you rarely use can still reduce your borrowing power, so reducing unused limits before applying can help.
Banks check you could still afford repayments if rates rose, so they apply a servicing test rate higher than the advertised rate (Source: BNZ). It is a buffer, not the rate you pay, and it is a big reason banks lend less than a simple repayment calculator suggests.
Often, yes. The deposit and DTI rules are common across banks, but each sets its own test rate, living-cost assumptions, and treatment of overtime, bonus, and self-employed income. Those differences can move your figure meaningfully between lenders.
Common levers are growing your deposit, reducing credit card and personal loan limits, clearing short-term debt, and presenting income clearly. Because each bank weighs these differently, the same profile can qualify for different amounts depending on where you apply.
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This article is general in nature and is not financial advice. Lending criteria, lender policies, and relevant rules vary and change regularly. Always seek advice specific to your situation before making decisions. Read our disclosure statement →
