Investor DTI borrowing limit close
Investor mortgage borrowing is edging closer to where debt-to-income (DTI) restrictions start to kick in.
Tuesday, January 6th 2026, 9:56AM
by Sally Lindsay
The latest Reserve Bank data released at the end of last month shows about 15% of lending to investors in November was at a DTI of seven – the highest since August 2022.
DTI restrictions kick in for investors when their borrowing exceeds seven times their gross annual income, with banks only allowed to lend to a small percentage of investors above this threshold (around 20% of their new investor loans).
Cotality chief property economist Kelvin Davidson says if the banks aim to keep a 5% buffer between actual lending and the upper threshold of 20% to avoid any risk of Reserve Bank enforcement measures, investors may have already reached their limit.
He says it will be a key factor for the housing market this year, especially as the election nears and capital and Labour’s 28% capital gains tax and possibly interest deductibility become issues.
It is a different story for first home buyers. They can borrow at up to six times their income and so far banks have lent less than 10% at that level, compared to the 20% speed limit.
Meanwhile last month’s easing of the loan-to-value (LVR) rules hasn’t shown up in November’s RBNZ data, even though banks have often moved earlier on those sort of changes.
Low deposit lending to owner-occupiers was only 14%, well below the new 25% cap, while for investors less than 1% of lending was done at low deposit, well inside the new limit of 10%.
That could change with December’s figures due out in late January.
Mortgage pile expands
Overall $8.8 billion of new mortgages were lent in November, 19% higher or about $1.4 billion then in the same month in 2024. It was also the 26th rise in the past 28 months.
The stock of mortgage debt is up to $389 billion, 5.8% higher than at the same time than the previous year and the fastest rate of increase since July 2022.
Annual growth in the total value of new mortgages for other owner occupiers rose 20.9%, for investors it increased 14.5%, and first home buyers by 17.6%.
There were 21,196 new mortgages lent in the month, an increase of 11.7% from 18,981 in November 2024.
The average new loan value across all mortgage types increased to $415,122 this month, up 6.3% from $390,495 in the same month in 2024.
New mortgages for a change in loan provider increased by 17.6% compared to November 2024, the number of new commitments for property purchases rose by 7.6% and that of top ups by 13.5%.
The share of the value of new mortgages for property purchases increased to 61.6%, up from 60.8% in October, the share for changes in loan provider dropped to 23.3%, down from 23.4% and the share for top ups decreased to 10.7%, down from 12% in October.
| « Record levels of first home buyers taking out low deposit loans | Queenstown not off the radar for first home buyers » |
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