For the time, the RBNZ has released debt-to-income (DTI) data for new mortgage applications, showing the total borrower debt compared to borrower income.
While there was no indication as to what a high DTI may look like, the statistics provided some great insights into housing affordability. For example, one in three first-home buyers nationwide took out mortgages that are over five times their pre-tax annual income. And the proportion was even bigger in Auckland, where almost half of first-home buyers had a DTI of over five.
DTI ratios are still better than two years ago; to quote RBNZ financial system policy head Toby Fiennes, they are “high, but not extremely high”.
However, it’s important to keep these figures in check, to make sure that Kiwis’ borrowing capacity will still be in order should interest go up. Good food for thought – and something that our Mortgage Link advisers have had at heart for several years.
To get in touch with the team at Mortgage Link, please contact:
021 835 506
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This publication does not constitute personalised financial advice, may not be relevant to individual circumstances and should not be seen to constitute a recommendation of any description. Before taking any action in relation to matters dealt with in this publication please seek Professional Financial Advice.
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