How Much Income You Need for a $500k / $700k / $1M Mortgage in NZ

The two gates every application passes through

NZ banks size a mortgage with two separate checks, and you must clear both:

• Servicing: can you afford repayments calculated at the bank's test rate — a buffer rate set above actual market rates — after your declared living expenses and all debt commitments?
• DTI: since July 2024 the Reserve Bank caps most owner-occupier lending at 6× gross household income (7× for investors), with each bank allowed to write a limited share above that.

Illustrative income needed (2026)

The table below is indicative only — it assumes a clean file, average living expenses, no other debts, a 30-year term, and a test rate in the range banks have been using recently. Every lender's calculator lands differently, which is precisely why the same borrower can be declined at one bank and approved at another.

Why is the realistic guide higher than the raw DTI floor? Because servicing usually bites first: test-rate repayments plus real-world expenses mean most households need headroom above the mathematical minimum.

What moves your number most

• Existing debts: banks assess your credit card limits (not balances), car loans, BNPL and student loans against you. Cutting a $15k unused card limit can add tens of thousands to borrowing power.
• Dependants and expenses: more dependants means higher assessed living costs.
• Income type: PAYE base salary counts fully; overtime, bonus and self-employed income are often scaled back.
• Boarder or rental income: counted, but usually only a portion of it.

How to find your real ceiling

Online calculators use one generic formula. In reality the spread between the most and least generous lender for the same borrower is regularly six figures. A broker runs your actual numbers through multiple bank calculators before you ever apply — protecting your credit file from unnecessary declined applications.

Frequently asked questions

Can a single person on $100k get a $600k mortgage in NZ?

At 6× DTI the ceiling is $600k exactly, but servicing at the test rate with normal living expenses usually lands a single borrower below that. Some lenders will get closer than others — this is a scenario where lender choice matters most.

Do banks use my actual interest rate to assess affordability?

No. They test your repayments at a higher buffer (test) rate to make sure you could still pay if rates rose. Test rates move with the market and differ by bank.

Does my partner's income count if we buy together?

Yes — joint applications combine gross household income for both the DTI cap and servicing, along with both applicants' debts and expenses.

Is the 6× DTI cap absolute?

No. Banks may write a limited portion of new lending above the cap (a 'speed limit'), and new-build lending is exempt. Exceptions are competitive — strong files get them first.