RBNZ DTI Rules: A New Zealand Mortgage Adviser's Guide to the 6x / 7x Limits

The Reserve Bank of New Zealand's debt-to-income (DTI) restrictions came into force on 1 July 2024, and they've quietly reshaped how every Kiwi mortgage adviser structures a deal. If you're writing new lending and you're not stress-testing DTI before sending the application to the bank, you're going to get more declines than you used to.

This guide walks through how the rules actually work, the exemptions that matter in practice, and how to use a DTI-aware borrowing capacity calculator to scope a client before you even file a pre-approval.

The headline numbers

Borrower type	DTI cap	Speed limit (% of new lending above cap)
Owner-occupier	6 × gross income	20%
Investor	7 × gross income	20%

Both apply at the registered bank level, not per loan. Non-bank lenders are not directly subject to RBNZ DTI restrictions.

How DTI is actually calculated

DTI is:

Total debt ÷ Gross annual household income

What goes in "total debt"

• The new home loan being applied for
• All existing mortgages (including investment property mortgages)
• Personal loans, car loans, HP, BNPL balances treated as debt
• Credit card limits (the full limit, not the balance — this catches a lot of clients out)
• Revolving credit facilities at their limit

What goes in "gross income"

• PAYE salary and wages
• Bonus / commission (usually averaged over 2 years, then shaded)
• Self-employed net income (typically 2-year average)
• Rental income (shaded to ~75–80% to allow for vacancy and costs — varies by bank)
• Regular secondary income

What's typically not counted (or heavily shaded)

• KiwiSaver employer contributions
• One-off bonuses
• Overtime without a consistent 2-year pattern
• Boarder / flatmate income (shaded heavily, some banks exclude)

Worked example

A client on NZ$135,000 gross household income wants to buy an owner-occupier home:

• Maximum DTI-compliant debt: 6 × NZ$135,000 = NZ$810,000
• Existing debts: car loan NZ$18,000 + credit card limit NZ$10,000 = NZ$28,000
• Maximum new home loan under DTI: NZ$810,000 − NZ$28,000 = NZ$782,000

That's before any serviceability check at the bank's test rate (typically 8–9%). If serviceability at the test rate is lower than the DTI cap, serviceability wins — DTI just adds an additional ceiling.

Exemptions that matter in practice

Not every loan is subject to DTI. Key exempt categories:

• New builds (certificate of code compliance issued less than 6 months before loan settlement, or loan used to fund construction)
• Kāinga Ora First Home Loan and other Kāinga Ora products
• Refinances with no net new borrowing (like-for-like swap)
• Bridging finance and construction loans
• Non-bank lending (not directly subject, though banks funding non-bank facilities may still apply DTI tests)

The new build exemption is the single most valuable lever for clients stretching borrowing capacity. Pointing a client who's 5% over DTI toward new builds can unlock deals that would otherwise decline.

DTI vs LVR: two caps, not one

Brokers sometimes still run pre-approval conversations as if LVR (loan-to-value ratio) is the only binding constraint. Post-July 2024, it isn't. A client can comfortably pass LVR on a 20% deposit but get rejected on DTI because their income doesn't scale to the loan size.

Rule of thumb when sizing a client:

1. DTI cap — what's the maximum loan size given their income?
2. LVR cap — what's the maximum loan size given their deposit?
3. Serviceability — can they service that loan at the bank's test rate with a margin?

The binding constraint is whichever of the three produces the smallest loan.

The 20% speed limit — what it means for exceptions

Banks can write up to 20% of new lending above the DTI caps. This is the "speed limit". It's not a loophole — banks ration these exception slots tightly, usually for:

• Very low LVR deals (strong collateral offsetting DTI stretch)
• High-income clients with strong savings behaviour
• Clients with significant non-mortgage assets

If you're trying to get an exception, your application needs to stand out on fundamentals other than income. File strength matters more than it did pre-July 2024.

How to stress-test DTI before filing

Our free NZ borrowing capacity calculator applies the RBNZ DTI rules alongside bank serviceability assumptions, so you can:

• Enter the client's income, existing debts, and credit card limits
• Set owner-occupier or investor
• Toggle the new-build exemption
• See both the DTI ceiling and serviceability-implied maximum side by side

It's a 60-second scope before you start pulling bank statements.

White-label the calculator on your adviser site

If you're an FSPR-registered mortgage adviser and want to offer DTI-aware borrowing capacity on your own website — branded with your colours and logo, with client data staying in your ecosystem — CalcWidgets provides an embeddable white-label widget. Free 30-day trial, no credit card required. See how it works →

One more thing: the rules may change

RBNZ can tighten (or loosen) DTI settings at any time. The current 6x / 7x caps with 20% speed limit are the initial calibration. RBNZ has been explicit that they'll adjust settings based on credit growth and financial stability indicators. Subscribe to RBNZ's Financial Stability Report releases to keep current — rules that applied when you pre-approved a client three months ago may not be the rules at settlement.