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How Much Can I Borrow Calculator

Estimate how much a NZ bank might lend you based on your income, expenses, and existing debts. Uses typical NZ lending criteria including the CCCFA rules.

By Konstantin IakovlevPublished 28 March 2026Last reviewed
Data stays on your deviceRBNZ market data

About this calculator

This calculator implements LVR + DTI bank serviceability rules from Reserve Bank of New Zealand. Last consulted 15 March 2026. Verify the figures yourself by following the link.

Current NZ bank lending rules

RBNZ DTI rules effective 1 July 2024
  • •Bank stress test rate: ~8% (1-2% above offer rate)
  • •DTI cap (owner-occupier): 6× gross household income
  • •DTI cap (investor): 7× gross household income
  • •Banks may exceed DTI cap: ≤20% of new lending
  • •Owner-occupier LVR: ≤80% standard
  • •First Home Loan deposit: 5% (via Kāinga Ora)

Source: RBNZ — DTI restrictions

Disclaimer

This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available IRD data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.

How banks calculate your borrowing power

Banks use a 'serviceability test' at a stressed interest rate (~8% as of 2026) plus a Debt-to-Income (DTI) ratio limit. You can only borrow up to whichever is LOWER.

  1. 1

    Calculate disposable monthly income

    Disposable = (annual_income ÷ 12) − living_expenses − existing_debt_payments − $400/dependant

    Banks assume conservative living costs (~$2,500/mo single, ~$4,000 couple, +$400 per child).

  2. 2

    Apply serviceability buffer (stressed rate)

    Available_for_mortgage = disposable × ~35%  (typical bank policy)

    Banks reserve ~35% of disposable income for mortgage payments — the rest stays as buffer.

  3. 3

    Reverse the PMT formula at the stressed rate

    Max_loan = available_for_mortgage × ((1+i)ⁿ − 1) ÷ (i × (1+i)ⁿ)   where i = 8%/12, n = 360

    Banks test at ~8% even if actual offer rate is lower. Protects against rate rises.

  4. 4

    Apply DTI cap (RBNZ rule from July 2024)

    DTI_max = annual_gross_income × 6  (owner-occupier)  OR  × 7  (investor)

    Borrowing power = min(serviceability_loan, DTI_max). Banks may exceed cap on ≤20% of new lending.

Worked example

Inputs: $120k household income, $20k annual expenses, no kids, no debt

Result: Serviceability gives ~$650k. DTI cap = $120k × 6 = $720k. Borrowing power = $650k (the lower figure).

Frequently Asked Questions

How do banks calculate borrowing power in NZ?
New Zealand banks calculate your borrowing power by assessing your gross income, then subtracting estimated living expenses (using the Household Expenditure Survey benchmarks or your declared expenses, whichever is higher), any existing debt repayments, and applying a stress-test interest rate of approximately 8% to 9% — well above current market rates — to ensure you could still afford repayments if rates rise. Lenders also consider your employment type (permanent vs. contractor), the number of dependants, and your credit history. Under the CCCFA, banks must conduct a thorough affordability assessment for all new lending. The result is the maximum loan size at which your net income — after all expenses and stress-tested repayments — remains positive. Different banks use slightly different methodologies, so your borrowing capacity can vary by $50,000 or more between lenders. Source: RBNZ — Mortgage Lending Restrictions; MBIE — CCCFA (consumerprotection.govt.nz).
What is the DTI (debt-to-income) restriction in NZ?
The debt-to-income (DTI) ratio restriction was introduced by the Reserve Bank of New Zealand (RBNZ) and came into effect in July 2024. Under this restriction, banks can lend to owner-occupiers at a maximum DTI of 6 — meaning total debt (including the new mortgage and all existing debts) cannot exceed 6 times the borrower's gross annual income. For example, a household earning $120,000 per year can borrow a maximum of $720,000 in total debt. Investors face a tighter cap of DTI 7. These restrictions apply on a portfolio basis, meaning banks can still make a limited proportion of loans above the caps. The DTI rules are intended to make the NZ housing market more resilient to income shocks. They interact with LVR (loan-to-value ratio) restrictions, which limit low-deposit lending. Source: RBNZ — Debt-to-Income Restrictions (rbnz.govt.nz).
How does the OCR affect my borrowing capacity?
The Official Cash Rate (OCR) set by the Reserve Bank of New Zealand (RBNZ) is the benchmark interest rate that influences all lending and deposit rates in NZ. When the RBNZ raises the OCR, commercial banks increase their mortgage rates, which directly reduces your borrowing capacity because your repayments on any given loan amount become higher. For example, if the OCR rises by 0.5%, a typical 1-year fixed mortgage rate might also rise by 0.4%–0.5%, adding roughly $60–$80 per month to repayments on a $500,000 loan. Banks also factor a stress-test buffer on top of current rates, so even before the OCR moves, their serviceability assessment already accounts for potential future increases. The OCR was raised aggressively in 2022–2023 to combat inflation (peaking at 5.5%) and has been reducing since mid-2024. Source: RBNZ — Official Cash Rate (rbnz.govt.nz).
What is the CCCFA and how does it affect lending in NZ?
The Credit Contracts and Consumer Finance Act (CCCFA) is NZ legislation that governs consumer lending and requires all lenders to conduct thorough affordability assessments before approving loans. Amended in 2021 and refined in 2022, the CCCFA requires lenders to verify income, scrutinise bank statements, assess living expenses in detail, and ensure borrowers can afford repayments over the life of the loan without suffering substantial financial hardship. In practice, this means banks examine 3 months of bank statements and may decline loans if they see irregular spending — such as online gambling or high discretionary expenses — even if overall income is strong. The 2021 amendments were initially criticised for being overly restrictive; adjustments in 2022 and 2023 softened some requirements. The CCCFA also regulates interest rates, disclosure obligations, and protections against predatory lending. Source: MBIE — CCCFA (consumerprotection.govt.nz); Commerce Commission NZ.

Estimates how much you can borrow for a mortgage based on your income, expenses, and current interest rates. NZ banks assess affordability using a test rate (typically 2–3% above the actual lending rate) and Debt-to-Income (DTI) limits.

How this calculator works

Maximum mortgage ≈ (net income − living expenses − other debt payments) / monthly mortgage payment per $1,000. NZ banks also cap at 6× income (DTI limit from RBNZ). Actual pre-approval depends on credit history, employment type, and deposit size.

NZ Mortgage Affordability Rules (2026-27)

RBNZ DTI limit (owner-occupier)6× gross income
Bank serviceability test rate~8.5–9.0% (2026-27)
Standard LVR restriction20% deposit (LVR 80%)
Low equity lending10% deposit (limited availability, LEP applies)
Current 1-yr fixed mortgage rate~6.5–7.5% (2026-27)

DTI limits and test rates are indicative. Individual bank policies vary. Get pre-approval for a definitive borrowing estimate.

Worked Examples

Single income $90,000, no other debts, 20% deposit saved

Estimated maximum borrowing approximately $540,000 (6× DTI).

  1. Gross income: $90,000
  2. DTI limit (6×): $90,000 × 6 = $540,000 maximum loan
  3. Serviceability test at 9%: monthly payment on $540,000 = ~$4,833
  4. Net income ~$67,000/yr = $5,583/month
  5. Living expenses estimate ~$2,500/month
  6. Surplus for mortgage: $5,583 - $2,500 = $3,083/month (may limit below DTI cap)
  7. Actual approval depends on credit history, expenses, and lender assessment

Couple, combined gross income $140,000, existing car loan $400/month

Estimated maximum borrowing approximately $700,000–$840,000 (DTI limited to 6×).

  1. Combined gross income: $140,000
  2. DTI cap: $140,000 × 6 = $840,000
  3. Existing debt reduces serviceability: $400/month car loan
  4. Net combined income ~$108,000/yr = $9,000/month
  5. Living expenses estimate (couple): ~$4,000/month
  6. Available for mortgage: $9,000 - $4,000 - $400 = $4,600/month
  7. At 7% interest, $4,600/month services ~$580,000–$620,000 loan

Built and maintained by Konstantin Iakovlev. Data sourced from the IRD and official New Zealand government sources.

Last reviewed:

Official Sources

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