Calculator Assumptions

How the borrowing calculator works and what it assumes.

Important disclaimer

All results are indicative estimates only. They are NOT financial advice, pre-approvals, or loan offers. Actual lending depends on verified income, credit history, the lender's current policy, and your full financial picture.

Assessment interest rates

Banks stress-test your mortgage repayments at a higher rate than the rate you'll actually pay. This is called the assessment or test rate. We use two assessment rates to produce a borrowing range:

Upper estimate

6.5%

More generous assessment rate

Lower estimate

7.5%

Conservative assessment rate

Different lenders use different assessment rates. These are illustrative figures, not the policy of any specific lender.

DTI (Debt-to-Income) limits

The RBNZ DTI restrictions cap how much banks can lend relative to your gross income. The calculator uses these reference multiples:

Owner-occupier DTI (upper)6×

Owner-occupier DTI (conservative)5×

Investor DTI (upper)7×

Investor DTI (conservative)5.5×

Income & expense assumptions

Loan term30 years

Rental income shading (investment)75%

Credit card monthly liability3% of limits

Default household expenses (if not entered)$2,500/month

Dependant monthly allowance$350/dependant

Safety buffer (applied to income)5%

PAYE income tax calculation

For PAYE employees, the calculator estimates net (after-tax) income using the following tax bands and ACC levy:

$0 – $14,00010.5%

$14,000 – $48,00017.5%

$48,000 – $70,00030.0%

$70,000 – $180,00033.0%

Over $180,00039.0%

ACC earner levy1.53%

Deposit thresholds

The calculator checks whether your deposit meets standard LVR requirements:

Standard owner-occupier deposit20% of purchase price

Standard investor deposit30% of purchase price

First home buyers may qualify for exceptions under the First Home Loan scheme. The calculator does not model this — discuss with Jeremy.