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) ratios from the Reserve Bank of New Zealand (RBNZ) will restrict bank lending to ensure borrowers can afford repayments.
The rules limit total borrowing against gross income:
- Owner-occupiers: up to six times their income.
- Investors: up to seven times their income.
Designed to ensure financial stability, DTIs will likely moderate future property booms but have minimal immediate impact. Banks can still offer some high-DTI loans, and exemptions apply for construction, refinancing, and Kāinga Ora loans.
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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