NZ Mortgage Affordability Calculator
Unlike a simple repayment calculator, this uses the bank serviceability (UMI) method that lenders actually apply. Enter your income, expenses, and see a realistic borrowing estimate with both a test rate and your expected rate.
How this calculation works
Uses the bank UMI (Uncommitted Monthly Income) method: after-tax income minus living expenses and debt, capped at 40% of after-tax income for mortgage servicing. The test rate (typically 1-3% above the actual rate, often around 8.5%) is used to calculate maximum borrowing. This mirrors the CCCFA serviceability assessment that NZ banks apply.
Sources
- RBNZ — DTI and serviceability restrictions: rbnz.govt.nz
- CCCFA responsible lending code (updated July 2024)
- Major NZ bank serviceability calculators (ANZ, ASB, BNZ, Westpac)
When to use this
- — Getting a realistic borrowing estimate before talking to a mortgage broker
- — Comparing how different interest rates affect your borrowing power
- — Understanding the gap between what you can borrow and what you can comfortably repay
Important limitations
- — Does not account for lender-specific policies, credit score, or non-standard income
- — LVR restrictions (20% deposit minimum for owner-occupiers) may further limit borrowing
- — Bank assessment includes a detailed expense review, not just a single number
- — Different lenders use different test rates and expense benchmarks
Common questions
Why use a test rate higher than the actual rate?
Banks must test that you could still afford repayments if interest rates rise. The test rate is typically 1-3% above the actual rate. This is a regulatory requirement under the CCCFA.
How does this relate to DTI restrictions?
The RBNZ introduced Debt-to-Income (DTI) restrictions. For owner-occupiers, total debt is generally limited to 6× gross income. This calculator uses the UMI method which is typically more restrictive than DTI for most buyers.
What expenses should I include?
Include everything except rent/current mortgage: food, utilities, transport, insurance, childcare, subscriptions, discretionary spending. Banks use household expenditure benchmarks — be conservative.
Next step
Turn these numbers into a plan.
FHBG can record your planning context and match you with resources — no obligation, no spam.
Last reviewed: 2026-07-23. Information only — not financial advice. Use these estimates to prepare better questions before speaking with a lender, lawyer, or regulated adviser.