Buying a home in New Zealand is a dream for many, but with strict lending criteria, you may be wondering: how can I increase how much I can borrow from the bank? Whether you’re a first-time buyer or looking to upgrade, boosting your borrowing power can open up more property options and improve your financial flexibility. Here are five reliable strategies to help you borrow more on your NZ mortgage—responsibly and sustainably.
1. Improve Your Debt-to-Income Ratio
Your Debt-to-Income Ratio (DTI) is one of the most important metrics banks use when deciding how much you can borrow. It’s the proportion of your income that goes toward existing debts. In New Zealand, most lenders prefer a DTI under 6 for non-investors or under 7 for investors.
How to optimize it:
Pay down debts like credit cards, personal loans, and student loans.
Avoid new debts for at least six months before applying for a mortgage.
Consolidate loans to reduce your monthly repayment obligations.
2. Decrease Your Committed Income Obligations
Lenders assess your committed income—regular deductions that reduce your take-home pay—when calculating how much you can borrow. Even if you’re earning a good salary, high fixed outgoings can limit your mortgage eligibility.
Reduce these to boost borrowing power:
KiwiSaver contributions: Temporarily reducing your employee contribution can free up more income for loan servicing. Even if you reduce your contributions but then still invest that money into your KiwiSaver, it will no longer be counted as ‘committed income’.
Credit card limits: Even unused limits are counted against you. Reducing or canceling cards can significantly increase your affordability.
Buy Now, Pay Later schemes (e.g. Afterpay): These are often viewed as liabilities and can reduce your maximum borrowing capacity.
📉 The lower your monthly commitments, the more of your income banks consider “available” for mortgage repayments.
3. Maximise Your Deposit (Even Beyond 20%)
While a 20% deposit is the standard to avoid Lenders Mortgage Insurance (LMI), a larger deposit can unlock even better loan terms and lower your Loan-to-Value Ratio (LVR).
Ways to boost your deposit:
Tap into the KiwiSaver First Home Withdrawal and First Home Grant if eligible.
Explore family gifting or guarantor options.
Increase savings using high-interest savings accounts or term deposits.
🏡 Lenders often favor borrowers with more “skin in the game.”
4. Increase Household Income
This one’s straightforward but effective. Higher income = higher borrowing capacity. Lenders want to see that you can comfortably repay your mortgage even if interest rates rise.
What helps:
Add a second applicant (e.g., partner or spouse).
Declare side income (freelancing, Airbnb, rental).
Negotiate a raise or pursue contract work if your role allows it.
Remember, you’ll need to prove the income is stable and ongoing. Use payslips, contracts, or bank statements to back it up.
5. Reduce Discretionary Spending
Lenders closely scrutinize your living expenses during the pre-approval stage. Trimming the fat from your spending can improve your surplus income, directly increasing your eligibility.
Review and reduce:
Subscriptions (Netflix, Spotify, gym)
Frequent dining out and takeaways
Unnecessary retail or Afterpay purchases
Final Thoughts
Increasing your borrowing power in New Zealand isn’t about “gaming the system”—it’s about showing lenders that you’re financially ready for a mortgage. Each of the strategies above aligns with responsible lending principles and can be implemented over time.
Make it a goal to review your financial position 3–6 months before applying for a mortgage. It could be the difference between a loan that limits you and one that unlocks your ideal home.
Frequently Asked Questions
How do I check if I’m eligible for a home loan in NZ?
Use our online mortgage calculator or speak with us here.
Does KiwiSaver help increase borrowing power?
Indirectly, yes. It boosts your deposit, lowering your LVR and risk profile, which can improve the amount you’re offered.
What is considered when calculating how much I can borrow in NZ?
Lenders in New Zealand assess income, expenses, existing debts, credit card limits, deposit size, employment stability, and your debt-to-income ratio. Some also factor in future interest rate increases to stress test your affordability.
Can I increase borrowing power with a guarantor in NZ?
Yes. Using a guarantor—typically a parent or close relative—can allow you to borrow more or avoid Lenders Mortgage Insurance (LMI), especially if your deposit is under 20%.
Do credit card limits affect mortgage applications in NZ?
Yes. Even if you’re not using the card, banks usually treat 3%–5% of your total credit limit as a monthly liability. Reducing or cancelling unused cards can increase your borrowing power.
