The two rules
The Reserve Bank sets two limits on bank lending:
| Rule | Home you’ll live in | Investment property |
|---|---|---|
| Deposit (LVR) | No more than 25% of new loans can have less than a 20% deposit | No more than 10% of new loans can have less than a 30% deposit |
| Debt-to-income (DTI) | No more than 20% of new loans can be over 6 times income | No more than 20% of new loans can be over 7 times income |
These are “speed limits” on each bank’s lending as a whole, not a ban on any one loan. So some people do get a loan with a smaller deposit or more debt. The bank decides who, and a smaller deposit usually costs more through a low-equity margin or fee.
The debt-to-income rules started on 1 July 2024, and the current deposit settings have applied since 1 December 2025. The Reserve Bank kept both unchanged at its August 2026 review.
How much can I borrow?
Your debt-to-income ratio is all your debts, including the new mortgage, divided by your gross income (before tax). For a home you’ll live in, going over 6 puts you in the limited group.
| Income | 6 × income | Home price | Monthly |
|---|---|---|---|
| $80,000 | $480,000 | $600,000 | $2,577 |
| $100,000 | $600,000 | $750,000 | $3,221 |
| $120,000 | $720,000 | $900,000 | $3,865 |
| $150,000 | $900,000 | $1,125,000 | $4,831 |
These assume a 20% deposit, no other debts, and monthly repayments at 5% over 30 years. New 2-year fixed rates averaged 4.99% in August 2026.
Other debts come off the limit. The Reserve Bank’s example is a household earning $120,000 with $20,000 of other debts: borrowing over $700,000 would put them over 6 times income ($720,000 − $20,000).
Which limit will stop me?
Whichever you hit first. With less than a 20% deposit, the deposit rule sets the price: every $10,000 saved lets you buy about $50,000 more. Once your savings reach 20%, the debt-to-income limit takes over.
Over 6 times income counts as high debt-to-income lending, which banks can only do for a limited share of loans.
What counts as debt?
Counted:
- the new mortgage and any other mortgages
- personal loans and car loans
- student loans
- credit cards and overdrafts, at their limit, not what you owe on them
Not counted:
- business debt
- buy now, pay later
- interest-free loans from family that you only repay when the home is sold (banks can leave these out)
Banks can also ignore debts under $1,000. Because cards count at their limit, lowering or closing an unused credit card before you apply can raise how much you can borrow.
Income includes your salary and other income, such as rent, self-employment income and benefits.
When don’t the rules apply?
These loans don’t count towards either limit:
- Kāinga Ora loans, including First Home Loans
- New builds: building a new home, or buying one from the developer within 6 months of it being finished
- Refinancing or moving your mortgage to a new home, without borrowing more
- Bridging finance, and loans to fix a leaky or damaged home
The rules apply to banks only, not to non-bank lenders such as finance companies.
Banks’ own checks
Even within the limits, a bank must make reasonable inquiries that you can afford the loan. Banks test your repayments at a higher rate than you’d actually pay, and look at your living costs, so you may be offered less than 6 times your income.
Help with the deposit
- First Home Loan: a Kāinga Ora-backed loan with just a 5% deposit, from banks including ASB, Westpac and Kiwibank. Your income before tax must be $95,000 or less on your own, or $150,000 or less with dependants or for two or more buyers. You pay a 1.2% mortgage insurance premium, and you can’t own other property. There’s no price cap.
- KiwiSaver: after 3 years as a member, you can usually take out everything except $1,000 to buy your first home, including the government contributions. It can’t be used for an investment property.
- First Home Grant: this closed to new applications in May 2024.
Work it out for your income
Our borrowing calculator applies the deposit and debt-to-income limits to your income, savings and other debts. See the repayments on any loan with our mortgage calculator.