How Much Mortgage Can I Get on a $70,000 Salary? A First‑Time Buyer Guide

When you earn $70,000 a year and are eyeing your first home, the big question is: mortgage eligibility - how far can your borrowing stretch? This guide walks you through the numbers, the ratios lenders eye, and the steps you need to take in New Zealand, so you can walk into a mortgage meeting with confidence.

What a Mortgage Loan Actually Is

Mortgage loan is a long‑term loan secured against real property, typically used to purchase a house. It lets you spread the cost of a home over 20‑30 years, with interest added to each payment. In New Zealand, most mortgages are offered by banks, building societies, or non‑bank lenders.

Who the First‑Time Homebuyer Is

First‑time homebuyer refers to anyone purchasing a residential property for the first time. In NZ, this group often benefits from government schemes like first‑home grants and KiwiSaver withdrawal options.

How Salary Turns Into Borrowing Power

lenders start with your gross annual income - $70,000 in this case - and apply a set of rules to decide how much they’re willing to lend. The most common rule of thumb is the 5‑times salary cap, meaning you could theoretically qualify for up to $350,000. But that number sits at the top of a ladder; real approval depends on three key ratios.

Key Ratio #1: Debt‑to‑Income (DTI) Ratio

Debt‑to‑income ratio is the percentage of your gross monthly income that goes toward debt repayments, including the prospective mortgage. NZ lenders usually cap DTI at 30‑35% for the new mortgage portion. With a $70,000 salary, your gross monthly income is about $5,833. At a 35% DTI, the maximum monthly mortgage payment you could afford is roughly $2,041.

Key Ratio #2: Loan‑to‑Value (LVR) Ratio

Loan‑to‑value ratio measures the loan amount against the property’s purchase price. Banks in NZ typically allow a maximum LVR of 80% for first‑time buyers, meaning you need at least a 20% deposit. Some lenders will go higher - up to 90% - if you have a solid credit history or can use a guarantor.

Key Ratio #3: Interest Rate Impact

Interest rate determines how much of your monthly payment goes toward interest versus principal. As of October 2025, the average variable rate sits around 5.6%, while a 5‑year fixed rate averages 6.2% according to the Reserve Bank of New Zealand data. Lower rates increase borrowing power because the same payment covers a larger loan.

Putting the Numbers Together

Let’s run a quick scenario. Assume you find a $400,000 house in Auckland, and you have a 20% deposit ($80,000) saved via savings and a KiwiSaver withdrawal.

• Purchase price: $400,000
• Deposit (20%): $80,000
• Requested loan: $320,000 (80% LVR)

Using a 5‑year fixed rate of 6.2% over a 30‑year term, your monthly payment would be about $1,960. That fits inside the $2,041 DTI ceiling, so the loan is theoretically affordable.

If you prefer a variable rate of 5.6%, the payment drops to $1,828, giving you extra breathing room for other expenses.

Credit Score Matters

Credit score is a three‑digit number that reflects how reliably you’ve repaid debts in the past. In New Zealand, a score above 800 is considered excellent and can shave a few percentage points off your rate. Anything below 600 may push the lender to request a larger deposit or apply a higher interest rate.

Down Payment Strategies and KiwiSaver

Saving a 20% deposit is often the biggest hurdle. The KiwiSaver first‑home withdrawal scheme lets you cash out your contributions (plus government kick‑starts) once you’ve been a member for at least three years and meet the $5,000 minimum balance. For a $400,000 property, you could pull roughly $30,000‑$35,000 from KiwiSaver, reducing the amount you need to save externally.

Other options include:

• Family gift - a cash contribution that doesn’t need to be repaid.
• Shared ownership - buying a portion of the home and paying rent on the rest.
• First‑home grant - available for qualifying low‑to‑moderate income earners.

Choosing the Right Mortgage Type

Step‑by‑Step: Applying for Your Mortgage

1. Gather documentation: recent payslips, tax returns, bank statements, and credit report.
2. Get a pre‑approval: A mortgage broker or bank will run a quick check using your income and credit score. This tells you the loan size you’re likely to receive.
3. Calculate your deposit: Combine savings, KiwiSaver withdrawal, and any gifts.
4. Shop for properties: Keep your pre‑approval figure in mind to avoid over‑stretching.
5. Make an offer: Include any conditions like subject‑to‑finance.
6. Finalize the loan: The lender will request a full valuation, confirm the LVR and DTI, and lock in your rate.
7. Sign the mortgage contract and attend settlement: Funds transfer, and you become the legal owner.

Tips to Maximise Your Borrowing Potential

• Boost your credit score before applying - pay down existing credit cards and correct any errors on your credit file.
• Consider a guarantor - a parent or close relative can increase the LVR limit to 90%.
• Lock in a rate early if you suspect rises - the RBNZ has signaled possible hikes in 2026.
• Keep other debts low - even a small car loan can push your DTI over the limit.
• Use a mortgage broker - they can access lender panels not available to the public.

Common Pitfalls to Avoid

• Over‑estimating future income - lenders stick to current salary unless you have a signed contract for a raise.
• Ignoring hidden costs - stamp duty, legal fees, building inspections, and moving expenses can add 5‑7% to the purchase price.
• Choosing the lowest rate without considering fees - some low‑rate loans carry high administration fees.
• Failing to budget for rate changes - variable rates can jump 0.5‑1% within a year, raising payments.

Quick Checklist for a $70,000 Salary Buyer

• Estimate maximum loan: up to $350,000 (5× salary) - realistic target $320,000 after DTI test.
• Secure 20% deposit: $80,000 (savings + KiwiSaver).
• Check credit score: aim for 800+.
• Get pre‑approval before house hunting.
• Compare fixed vs variable rates using the table above.
• Factor in additional costs (legal, inspection, moving).
• Plan for rate changes - keep a buffer of 5‑10% of monthly payment.

Next Steps After Reading This Guide

Start by pulling your credit report from Equifax or Centrix. If the score is solid, reach out to a mortgage broker in Auckland for a pre‑approval quote. While you wait, line up your deposit sources - especially if you’re using KiwiSaver. The moment you have a pre‑approval, you can start viewing listings with confidence, knowing exactly how much you can borrow.