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Mortgage Lab tool

Debt-to-Income (DTI) Calculator

Calculate your debt-to-income ratio and understand how it affects borrowing

The Reserve Bank's DTI restrictions limit the proportion of a bank's new lending above specified thresholds. They are not a hard cap for every borrower, and each lender still applies its own credit and affordability criteria.

Gross Annual Income

$
$

Debts

$
$
$
$
$
$

Your DTI Ratio

3.9x

At or below 5x

Total Income

$160,000

Total Debt

$630,000

Existing Debts Included in This Estimate

$30,000

This estimate includes car loans, student loans, credit card limits, and other debts

Illustrative Mortgage Scenarios

After subtracting your existing debts of $30,000

At an illustrative 5x DTI$770,000
At an illustrative 6x DTI$930,000
At an illustrative 7x DTI$1,090,000

Maximum Total Debt Capacity (before existing debts)

At 5x DTI$800,000
At 6x DTI$960,000
At 7x DTI$1,120,000

How to Read These Scenarios

The 5x, 6x, and 7x figures are comparison scenarios, not borrowing limits or an approval estimate. Lenders also assess income, expenses, loan servicing, deposit, property, credit history, and their own policy.

What counts toward your DTI

Your debt-to-income ratio compares total debt against gross annual income. Banks can include the proposed mortgage, existing home loans, personal lending, credit card limits, and other committed debt when assessing the ratio.

  • Credit card limits can matter even if the balance is low.
  • Car finance and personal lending reduce your borrowing headroom.
  • Existing mortgages still count when you are buying again or refinancing.

How to improve your borrowing position

If your DTI is tight, the fastest improvements usually come from reducing unsecured debt, lowering credit limits, or adjusting the purchase budget before you apply.

  • Pay down short-term debt before applying.
  • Close unused credit cards or reduce limits where sensible.
  • Review the target price range if the proposed mortgage is pushing you above lender comfort levels.

Debt-to-income FAQs

Is a DTI of 6 always the hard limit?

No. Reserve Bank DTI restrictions apply to the mix of new lending a bank can make rather than setting a universal cap for every borrower. Lenders also apply their own credit policy, affordability assessment, and any relevant exemptions.

Do student loans and credit card limits affect DTI?

Yes, they can. Even if a student loan is interest-free in New Zealand, it still affects servicing and total debt position. Credit card limits can also reduce borrowing power.

What should I do if my DTI looks too high?

Focus on reducing smaller debts, trimming credit limits, or revising the purchase budget. A broker can also help assess whether another structure or lender appetite changes the outcome.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Actual loan terms, rates, and eligibility may vary. Please contact a Mortgage Lab adviser for personalised advice.

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