Debt to income (DTI) calculator
Since 1 July 2024, the amount you can borrow in New Zealand hasn't just depended on your deposit and whether the bank thinks you can afford the repayments. It also depends on how much debt you'd be carrying relative to your income.
Most people don't find out where they sit until a bank tells them. These calculators let you work it out first.
Both are Excel spreadsheets. Enter your details in the purple cells, keep your copy, and change the numbers as often as you like. No email address required.
What a DTI ratio actually is
Your debt to income ratio is your total debt divided by your gross (before tax) annual income, expressed as a multiple. A DTI of 5 means you owe five times what you earn in a year.
It's worth being clear on this because the term means something different overseas. In the United States, DTI compares your monthly debt payments to your monthly income and is expressed as a percentage. New Zealand compares total debt to annual income and expresses it as a simple multiple. If you've read an American article saying you want a DTI under 36%, that number has nothing to do with the rules here.
The rules the banks are working to
The Reserve Bank sets limits on how much high-DTI lending banks are allowed to do:
Owner-occupiers — no more than 20% of a bank's new residential lending can go to borrowers with a DTI above 6.
Investors — no more than 20% of new investor lending can go to borrowers with a DTI above 7.
That 20% is called a speed limit, and the distinction matters. The rule doesn't ban lending above 6 times income — it caps how much of it a bank can do. It also applies to new lending, not to the bank's existing book.
In practice, most borrowers should treat 6 (or 7 for investors) as a ceiling. Banks ration that 20% allowance carefully and tend to save it for the strongest applicants with compensating factors. Being at 6.4 doesn't mean an automatic decline, but it does mean you're competing for limited space — and how much space is left varies from bank to bank and month to month. It's genuinely possible to be declined at one bank and approved at another on identical numbers.
A worked example
Someone earning $135,000 between them, with $27,000 of existing debt:
6 × $135,000 = $810,000 total debt capacity $810,000 − $27,000 existing debt = $783,000 maximum mortgage
That $27,000 of car loan and credit card has cost them $27,000 of borrowing capacity — dollar for dollar. Which is the single most useful thing to understand about DTI: clearing consumer debt before you apply doesn't just improve how the bank feels about you, it directly increases what you can borrow.
What counts as debt
More than just the mortgage. Banks will generally include:
The new mortgage you're applying for
Any other mortgages, including on rental properties
Car finance and personal loans
Student loan balances
Credit cards and overdrafts
Banks commonly assess credit cards on the LIMIT rather than the balance, which catches people out.
Student loans are a double hit: the balance counts as debt, and the compulsory repayments reduce the income the bank assesses you on.
DTI and LVR both apply
These are separate rules and you have to satisfy both.
LVR is about your deposit — how much you're borrowing against the value of the property. DTI is about your income. They bind different people. If you've got a strong income and a small deposit, LVR is your constraint. If you've got a good deposit but modest income, DTI is what stops you.
Whichever gives the lower number is the one that decides what you can borrow.
Exemptions worth knowing about
Not all lending is caught by the DTI rules. The main exemptions include new builds and construction lending, Kāinga Ora First Home Loans, refinancing where you're not increasing the loan, and bridging finance.
The new build exemption is a deliberate policy choice to encourage supply, and it's significant: if the DTI limit is what's stopping you buying an existing home, building or buying off the plans may put a purchase within reach that otherwise isn't.
Improving your position before you apply
Clear consumer debt. Every dollar of car loan or credit card is a dollar less mortgage, so paying down $10,000 of debt is worth $10,000 of borrowing capacity.
Reduce credit card limits rather than just the balances, if your bank assesses on limits.
Get your income documented properly — bonuses, overtime and second incomes are treated differently by different lenders.
Time it. Bank quotas move month to month, so being told no in one week isn't necessarily a permanent no.
The calculators
Debt to income calculator (owner occupiers) — list all your income sources and all your debts, and it totals them for you. You'll see your current DTI, the maximum mortgage you're allowed at a DTI of 6, how much house that translates to, and how much your income would need to change if you were looking at something 10%, 20% or 30% more or less expensive.
Debt to income calculator (investors) — the same calculator built around the investor threshold of 7 rather than 6.
A note on what these can't tell you
DTI is one constraint of several. Your bank will also run its own affordability test, using a stressed interest rate well above the advertised one, and apply its own lending criteria on top of the Reserve Bank rules. Passing the DTI test doesn't guarantee approval.