Do You Know What Your Budget Is?

With the right knowledge, you can calculate your budget without waiting for the banks.

Embarking on the property hunt is an exciting time for many investors.

Whether it’s your first investment or your next big portfolio addition, the process is filled with potential. But without a clear budget, excitement can quickly turn into confusion.

With hundreds of listings on the market and lending conditions constantly shifting, it’s easy to get overwhelmed. That’s why understanding your borrowing power, even before approaching a bank or broker, is one of the smartest moves you can make.

In this guide, we’ll show you how to calculate your property investment budget using a simple formula that reflects current debt-to-income (DTI) rules.

You’ll walk away knowing how to estimate your lending power without wasting time chasing properties outside your price range.

Why Budget Clarity Matters in Today’s Market

Right now, banks are taking longer than ever to process home loan pre-approvals, often up to 10 working days or more.

And in a fast-moving market, that delay could mean missing out on a great opportunity.

If you want to act quickly and confidently, you need a ballpark figure upfront. Even if you’re not quite ready to apply for a mortgage, calculating your estimated borrowing power will keep you focused and competitive.

How to Estimate Your Property Budget Using DTI

Banks in New Zealand have increasingly moved toward using debt-to-income ratios (DTIs) to determine how much they’ll lend.

While the specific DTI ratio used can vary by lender, 6–7x your income is typical in 2025.

Here’s the basic formula:

((Household Income + Proposed Rental Income) × DTI) − Existing Mortgage = Estimated Budget

It's much simpler than it looks. Let’s break that down.

What You’ll Need:

• Income: Your total gross household income per year (before tax)
  

• Proposed Rental Income: The annual rental income you expect to receive from the property you’re looking to buy
  

• DTI Ratio: Most banks use a multiplier of 6 or 7, depending on risk profile, property type, and other factors
  

• Existing Mortgage: The current outstanding balance on any existing property loans

  
  

Example: How Much Can This Investor Borrow?

Let’s say you’re a homeowner looking to buy your first investment property. Here’s a quick scenario:

• Household income: $160,000 per year
  

• Expected rental income: $25,000 per year
  

• Existing mortgage: $400,000
  

• Bank DTI ratio: 6
  

Now apply the formula:

(($160,000 + $25,000) × 6) − $400,000 = $710,000

This gives you an estimated buying power of $710,000

.

This number isn’t exact; your real borrowing power may be lower or higher depending on things like personal debts, number of dependents, vehicle loans, and your monthly expenses, but it’s a solid starting point.

It puts you in the right zone when scanning the market and shortlisting properties.

The Best Investment Is the One You Can Get Lending For

It’s easy to get emotionally attached to a “dream property,” but the truth is, the best investment is the one you can actually fund.

Many would-be investors lose time and energy chasing properties outside their range or waiting on financing that doesn’t come through.

Instead, the savviest buyers do the maths early, stay realistic, and move fast when the right property pops up.

By understanding your estimated budget from day one, you can:

• Filter property listings more effectively
  

• Make offers with confidence
  

• Avoid unnecessary disappointment
  

• Move ahead of slower buyers waiting for bank feedback
  

Final Thoughts: Know Your Numbers, Take the Shot

In today’s market, opportunity favours the prepared.

By calculating your investment budget upfront, you position yourself to act quickly when good deals arise. And when you're competing in a tight market with lending restrictions and rising demand, that speed can make all the difference.

Know your numbers, stay within your lane, and be ready to strike.

Because in property investment, timing isn’t about luck; it’s about preparation.

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How Can We Help You?

We help Kiwis build wealth through property investment. Our advisors will take the time to understand your individual needs and recommend suitable investment properties to help you build wealth and set up your retirement.

What Does This Look Like?

We use a 3-step process:

1. We start with a Discovery Meeting where we learn about you, your goals, etc., and you learn more about us.

2. This is followed by a Strategy Meeting where we model your retirement plan, understand key investment concepts, and briefly touch on some investment choices.

3. Finally, an Asset Selection Meeting where we discuss investment options in more detail and make any recommended adjustments based on what we now know about you.

Who Are We Right For?

We help people make smart investment choices and set up their futures. From first-time investors to experienced investors, we can cater to a wide range of people and help set up their futures through research-based property investment.

How Much Does It Cost?

Our advice is free to you! If you choose to invest, we’re paid by the property developer. This developer-paid model allows us to provide no-obligation property investment advice in New Zealand, without charging clients directly.

What Do We Do, And What Don't We Do?

What We Do

We offer end-to-end New Zealand property investment advice, helping Kiwi investors grow wealth through smart, data-led decisions. Our focus is on quality new builds in strong locations, tailored to your goals, guided by a team that knows the NZ market inside out.What We Don’t Do

We don’t do KiwiSaver, shares, cryptocurrency, or broad financial planning. Thrive is not a generalist firm. We specialise in property investment in New Zealand because that’s where we deliver the most value. By staying focused, we cut through the noise and help our clients make confident, well-informed property investment decisions.

How Do I Start?

Start the process now by booking a time to talk with our advisor by clicking here.