NZ Mortgage Lending Rules 2026

New Zealand has two key macroprudential lending rules set by the Reserve Bank: Loan-to-Value Ratio (LVR) restrictions (since October 2013) and Debt-to-Income (DTI) restrictions (since 1 July 2024). LVR settings were last eased on 1 December 2025. Banks also apply their own serviceability and stress-test rules on top of these.

Borrowing Capacity LVR Calculator DTI Calculator

LVR Restrictions (From 1 December 2025)

LVR stands for Loan-to-Value Ratio. High-LVR lending means a loan where the LVR exceeds the threshold. The RBNZ caps how much of a bank's new lending can be high-LVR.

Borrower Type	High-LVR Threshold	Speed Limit (share of new lending)
Owner-occupier	LVR above 80% (deposit under 20%)	Up to 25% of new lending
Investor	LVR above 70% (deposit under 30%)	Up to 10% of new lending

Most high-LVR lending goes to first home buyers. The "speed limit" is a cap across each bank's total lending, not individual borrowers. Banks still apply their own criteria and may lend below LVR on any individual loan.

DTI Restrictions (From 1 July 2024)

DTI (Debt-to-Income) ratio is total debt divided by total gross annual household income. The RBNZ caps how much of a bank's lending can be to high-DTI borrowers.

Borrower Type	High-DTI Threshold	Speed Limit (share of new lending)
Owner-occupier	DTI above 6 (debt more than 6x income)	Up to 20% of new lending
Investor	DTI above 7 (debt more than 7x income)	Up to 20% of new lending

DTI calculation: Include all debt (new mortgage, existing mortgages, personal loans, car loans, student loans, credit card limits). Do not include rent payments. Income is gross (before tax) from all sources.

Exemptions from LVR and DTI Rules

Exemption	Applies to
Kainga Ora First Home Loan	Both LVR and DTI exempt (5% deposit option)
Refinancing (same or lower loan value)	Both LVR and DTI exempt
Loan portability (same total debt)	Both LVR and DTI exempt
Bridging finance	DTI exempt
Property remediation (e.g. leaky homes)	LVR exempt
Construction lending	Limited LVR exemption

Bank Serviceability Tests

Banks apply their own affordability and stress-test rules on top of LVR and DTI. These are not set by RBNZ but are required under the Responsible Lending Code (CCCFA).

Bank Test	Typical Application
Stress test interest rate	Around 8.5% to 9% (varies by bank and time)
Minimum living expenses	Bank's scale based on household size and location
Uncommitted Monthly Income (UMI) buffer	Typically $500 to $1,000+ positive cash flow required
Credit card limits	Often treated as fully drawn at ~3% monthly repayment
Income shading	Overtime, bonus, rental income often discounted 20 to 30%

Credit Contracts and Consumer Finance Act (CCCFA)

The CCCFA sets responsible lending standards that banks must follow when assessing any new mortgage application.

Requirement	Detail
Affordability assessment	Bank must verify borrower can make repayments without substantial hardship
Income verification	Must be evidence-based (payslips, IR3 returns, bank statements)
Expense verification	Bank statements typically reviewed for 3+ months
Regulator	Commerce Commission

LVR History (Recent Changes)

Effective Date	Owner-Occupier Speed Limit	Investor Speed Limit
1 December 2025 (current)	25% above 80% LVR	10% above 70% LVR
1 July 2024	20% above 80% LVR	5% above 70% LVR
1 June 2023	15% above 80% LVR	5% above 65% LVR
1 November 2021	10% above 80% LVR	5% above 60% LVR
1 May 2020 to 28 Feb 2021	Removed (COVID-19)	Removed (COVID-19)

Kainga Ora First Home Loan

Feature	Detail
Minimum deposit	5% of purchase price
Income cap (single)	$95,000
Income cap (joint buyers)	$150,000 combined
House price caps	Vary by region ($400,000 to $875,000)
Participating lenders	ANZ, ASB, BNZ, Kiwibank, Westpac, SBS, The Co-operative Bank, Unity, Westforce Credit Union