If you’re preparing to buy a home in New Zealand, one of the most important early questions is: How much mortgage can I afford based on my income and deposit?
Whether you’re a first-home buyer or an experienced investor, knowing your borrowing power helps you set a realistic budget, narrow your property search, and confidently approach a mortgage broker.
This guide will walk you through how mortgage affordability works in the NZ context and how to use our calculator to get an accurate estimate of what you could borrow.
How Do Banks Calculate Borrowing Power in New Zealand?
While each bank has its own lending model, most use the same three fundamentals: income, expenses, and deposit size. Here’s how that typically looks.
1. Income and Debt Servicing
Banks often apply a debt-to-income ratio (DTI) to determine the upper borrowing limit.
| Borrower Type | Common DTI Used | Example (Income = $100,000) |
|---|---|---|
| Owner-Occupied Buyer | 6x gross income | Up to $600,000 |
| Property Investor | 7x gross income | Up to $700,000 |
If borrowing as a couple, use your combined income when calculating DTI ratios.
2. Deposit and Loan-to-Value Ratio (LVR)
Your deposit size affects how much you can borrow. The LVR rules enforced by the Reserve Bank of New Zealand (RBNZ) set general benchmarks:
| Property Type | Minimum Deposit | Maximum LVR |
|---|---|---|
| Owner-Occupied (Existing) | 20% | 80% |
| Investment Property (Existing) | 35% | 65% |
| Owner Occupied (New Build) | 10% | 90% |
| Investment Property (New Build) | 20% | 80% |
If your deposit doesn’t meet these thresholds, your borrowing power will be limited unless you qualify under an exemption or government scheme.
Read our full guide on deposits here.
3. Interest Rates and Stress Testing
Even if a mortgage rate is advertised at 6.8%, banks often stress test affordability as if rates were at 8.0–8.5%. This means they check whether you could still make repayments if rates rise. This has a direct impact on how much you’re allowed to borrow.
Read more on how income, debt, and deposit affects your lending here.
The Advantage of New Builds
New builds often come with more favourable lending terms, especially under current Reserve Bank guidelines. Many lenders apply LVR exemptions to new build purchases, which means:
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You may be able to buy with as little as a 10% deposit
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Lenders may offer higher borrowing limits
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These properties may suit first-home buyers with smaller deposits
Regional Affordability
Borrowing power might be consistent across the country, but property prices vary significantly by region. For example:
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A $750,000 borrowing limit may buy a 2-bedroom unit in Auckland, but a 3-bedroom home in Christchurch or Hamilton.
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New builds may be more readily available in growing centres like Tauranga, Hamilton, or Wellington’s outer suburbs.
Always consider regional price trends and housing stock when setting your budget.
Why Use a Mortgage Calculator?
A mortgage calculator offers a quick, private way to understand what you can afford, before you commit to house hunting or speaking with a mortgage broker. It helps you:
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Set realistic expectations based on your current financial position
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Explore “what if” scenarios (e.g. changing your deposit or income)
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Prepare for conversations with a mortgage adviser or bank
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Reduce the risk of applying for a loan you can’t qualify for
Try It Now
Use the mortgage calculator below to:
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Estimate how much mortgage you can afford in NZ
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Compare owner-occupied vs investment borrowing power
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See how your income and deposit affect your buying potential
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Adjust your inputs and explore different scenarios
Once you have an estimate, you’ll be in a strong position to begin planning your next steps.
Property Purchase Calculator (NZ)
Property Purchase Estimates
🏡 Owner-Occupied
New Build:
Existing Property:
🏢 Investment Property
New Build:
Existing Property:
