How Much House Can I Afford in NZ? (2026 Calculator + Rules)

"How much house can I afford?" is the most-Googled NZ mortgage question. The honest answer: it depends on your income, your deposit, and the test rate the bank applies to your application.

Here's how banks actually calculate it in 2026, with three worked examples.

The 3 limits

Banks check three things before approving a mortgage:

1. Income multiple — typically 5.5-6.5× gross household income for a standard application.
2. Servicing test — your repayments at a stressed rate (around 7.5% in 2026, even though actual rates are ~6.00%) must be under ~40% of net income.
3. Loan-to-Value Ratio (LVR) — RBNZ requires 80% LVR for most owner-occupied buyers, meaning a 20% deposit. First-home buyers can sometimes get 90% LVR via the First Home Loan scheme.

The tightest of the three is your real ceiling.

Worked example: $80k household income

• Income multiple (6×): $480k loan max.
• Servicing test: At 7.5% test rate over 30 years, $480k = ~$3,357/month. After tax, $80k = ~$5,200/month net. Repayments would be 65% of take-home → fails.
• What passes: ~$380k loan = ~$2,660/month (51%) — still tight. A bank might approve $300-350k.
• Plus 20% deposit: house price ceiling ~$430-440k.

Worked example: $120k household income

• Income multiple (6×): $720k max.
• Servicing test: $720k at 7.5% = $5,036/month. Net income ~$7,300/month. Repayments 69% → fails.
• What passes: ~$550k loan = $3,847/month (53%). Bank likely approves $500-550k.
• Plus 20% deposit: house price ceiling ~$690k.

Worked example: $200k household income

• Income multiple (6×): $1.2m max — and the servicing test usually passes at this ratio because higher incomes have proportionally more discretionary money.
• What passes: Typically the full 6× applies. Loan ceiling ~$1.2m.
• Plus 20% deposit: house price ceiling ~$1.5m.

What the bank doesn't include

The 7.5% test rate is for the mortgage. It does NOT account for:

• Rates (~$3-5k/year)
• Insurance (~$2-3k/year)
• Maintenance (~1% of house value/year)
• Body corp fees (apartments)

Add ~$8-12k/year in "house running costs" before deciding if the bank's max is your actual max.

The realistic budget

A good rule for first-home buyers: target a mortgage repayment of 30-35% of net household income, not the 40% the bank will allow. That leaves room for the running costs above without strangling everything else.

For a $120k household income, that's ~$2,200/month repayment → ~$330k loan → ~$410k house with a 20% deposit.

Less ambitious than the bank's max. More sustainable.

Boosting your number

• Bigger deposit: Each extra $20k deposit means $20k less mortgage = ~$140/month freed up.
• Pay down other debt first: Banks subtract credit card limits and personal loan repayments from your servicing capacity.
• Two incomes counted: Make sure both partners' income is on the application — even part-time work counts.
• KiwiSaver withdrawal: First-home buyers can withdraw their KiwiSaver (minus $1k minimum) toward the deposit.

Where Steady fits

Track your deposit savings in Steady as a goal. The forecast tells you the realistic month you'll cross the threshold, based on your actual saving pace — not what you hope you'll save.

Disclaimer: General education. Run your specific scenario past a licensed mortgage adviser before house-hunting.