Buying guide
NZ debt to income ratios: The essential guide
Everything you need to know about the new DTI rules
AI summary
From July 1, 2024, new Debt-to-Income (DTI) rules from the Reserve Bank will limit bank lending.
- Owner-occupiers: Borrow up to six times gross income.
- Investors: Borrow up to seven times gross income.
Designed to ensure financial stability, the rules will likely moderate future property booms rather than affect current prices. Banks retain some flexibility, with 20% of lending permitted for high DTI borrowers. Exemptions apply for construction loans and Kāinga Ora schemes.
NZ Debt to income ratios explained
The new DTI rules mean:
Annual income x DTI Ratio - Maximum borrowing
Exemptions to the DTIs
Why did the Reserve Bank introduce DTIs?
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DTIs won't affect most buyers until the next upturn.
How could DTIs affect the property market?
Why DTis won’t affect prices right away
DTIs won’t affect every market the same
DTIs may moderate prices during a boom
DTIs will affect borrowers differently
Stuff you need to know about NZ debt to income ratios
Non bank lenders don’t have to adhere to DTI rules
You may be able to still get a mortgage from banks with a high DTI
Got a high DTI? There are ways to improve it.
You can improve your DTI
Examples of NZ DTIs
Let’s say you want to buy a home
Now, let’s say you want to increase your home loan
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