LVR and DTI Rules for NZ Property Investors in 2026

Two Reserve Bank rules shape almost every investment property loan in New Zealand: the loan-to-value ratio (LVR) restrictions, which decide how big a deposit you need, and the debt-to-income (DTI) restrictions, which limit how much you can borrow relative to your income.

This guide is for Auckland investors planning a purchase or a refinance. It explains both rules as they stand in October 2026, the exemptions that matter, and how they interact. It is general information; a mortgage adviser can tell you how they apply to you.

The rules apply to banks, not to you directly

Both restrictions are "speed limits" on banks. Each bank may only make a certain share of its new lending above a given LVR or DTI. They are not a legal cap on any individual borrower.

In practice, though, banks ration the small share of high-LVR and high-DTI loans they are allowed, and reserve it for their strongest applicants. For most investors, the thresholds work as the limit.

Both rules also apply only to new lending. An existing loan is not affected unless you take a top-up that pushes it over the threshold.

LVR rules: the 30% deposit

The loan-to-value ratio is the loan as a percentage of the property's value. A $630,000 loan on a $900,000 property is an LVR of 70%.

The current settings, last changed in December 2025, are:

Borrower	High-LVR threshold	Share of new lending allowed above it
Investor	Loan above 70% of value	No more than 10%
Owner-occupier	Loan above 80% of value	No more than 25%

For an investor, that means a deposit of at least 30% for most bank lending. On a $900,000 Auckland property, that is $270,000.

The investor allowance was doubled from 5% to 10% in December 2025, so high-LVR investor loans are somewhat easier to find than they were. They are still the exception.

Using equity in your home

Most investors do not fund a deposit from savings. They borrow against the equity in their own home.

The Reserve Bank allows for this with a combined collateral exemption. Where a loan is secured over both your home and the investment property, you can borrow up to 80% of your home's value and 70% of the investment property's value. If your home has enough equity, the bank can lend the full purchase price of the rental, secured across both properties.

The interest on money borrowed against your home to buy a rental is generally tax deductible, because what matters is what the money was used for, not which property secures it. Our guide to interest deductibility explains how that works and why the record of each drawdown matters.

DTI rules: seven times income

The debt-to-income ratio compares your total debt with your gross, before-tax annual income. It counts all your debt, not just the new loan.

Since 1 July 2024:

• banks can make no more than 20% of new investor lending to borrowers with a DTI above 7
• banks can make no more than 20% of new owner-occupier lending to borrowers with a DTI above 6.

Under the Reserve Bank's framework, rental income counts as income, based on the actual rent for a tenanted property or a market estimate for one that is not yet rented. Banks usually ask for a written rental appraisal as evidence of that estimate.

As an illustration, a couple earning $160,000 in salaries, with $40,000 a year of rent from an existing rental, has a gross income of $200,000. At a DTI of 7, their total debt, including their home, the existing rental and the new purchase, could reach $1.4 million before the loan counted as high-DTI.

For an investor who already owns a home and a rental, the DTI limit can be reached before the deposit is.

Exemptions that apply to both

The LVR and DTI restrictions do not apply to:

• New builds. Loans to build a new home, or to buy a newly built home from the developer within six months of completion. An extension or renovation of an existing house does not qualify.
• Refinancing, where the new loan is no larger than the old one.
• Portability, moving an existing loan to a new property without increasing it.
• Bridging finance.
• Property remediation, such as fixing a leaky home.
• Kāinga Ora loans, including First Home Loans.

The new-build exemption is why new townhouses are popular with Auckland investors. Our guide to investing in new builds covers the other trade-offs.

Non-bank lenders

The LVR and DTI restrictions are conditions on registered banks. Non-bank lenders can lend outside them, which is why a 20% deposit is sometimes possible through a non-bank. Expect higher interest rates and fees, and check the terms for refinancing back to a bank later.

The bank's own tests still apply

Meeting the Reserve Bank's thresholds does not guarantee a loan. Every bank also runs its own serviceability test, checking that your income covers your commitments at an interest rate higher than the one you will actually pay. Our guide to getting an investment property loan approved covers what banks look at.

Practical steps before you buy

1. Work out your equity. Get an estimate of your home's value and what you owe on it.
2. Add up your total debt, including your home loan and any personal or car loans, and compare it with seven times your gross income.
3. Get a rental appraisal for the property you are considering. Banks use it to assess the rental income, and a free rental appraisal from 360 gives you a realistic figure.
4. Talk to a mortgage adviser early. Ray White's sister company, Loan Market, is one option. An adviser can compare banks and non-bank lenders, and tell you where you sit against both rules.
5. Check the exemptions. A new build or a refinance may sit outside the rules entirely.

For the official settings and worked examples, see the Reserve Bank's pages on loan-to-value ratio restrictions and debt-to-income restrictions. Leverage is what makes property work as an investment, as our comparison of property and shares explains, and these two rules decide how much of it you can use.