Lenders calculate debt-to-income (DTI) ratio when you apply for a mortgage. This is the percentage of your gross monthly income that goes towards paying your debts.
Lenders don’t just look at your current balance. They look at your limit. They don’t know what you’ll spend on your credit card month to month. Therefore, they assume your full limit is used and interest applied. At approximately 18%, high limits can significantly reduce your borrowing power.
To instantly improve your DTI, reduce your credit card limit as much as possible and reduce overdraft or buy-no-pay later facilities.
Read about why the bank might not approve your loan, and what you can do next.
Your credit score is another factor lenders consider when deciding to approve a mortgage. High balances and missed payments can lower your score and signal higher lending risk.
New Zealand’s credit culture has been further pressured by the increased cost of living and higher credit card interest rates, leading some into further debt.
Many borrowers will recover as the economy improves. However, rebuilding credit takes time and consistent financial discipline.
If credit card debt is limiting what banks will lend, there are still solutions. We work with non bank lenders – see our full non bank lending services page. They focus more on your current situation than your past, offering approvals in exchange for slightly higher interest rates.
Platinum Mortgages specialises in helping clients get approvals, even with debt. In the end, managing credit-card debt and mortgage affordability in NZ often comes down to balancing your credit limits, repayment conduct, and lender choice.
Here are some practical ways to improve your affordability before applying again:
Confronting your debt can be challenging, but the right lender can make all the difference. At Platinum Mortgages, we specialise in connecting clients with lenders who take a more flexible approach to assessing applications. That means even if credit card debt has reduced what the banks are willing to offer, there are still ways forward.
Before you decide, see our balanced guide on the pros and cons of non bank lenders so you can weigh costs, timing and the refinance plan.
Our non bank lending pathways are designed to give you choices that the banks can’t.
If you want a mortgage and are concerned about your debt, you don’t need to find the answers alone. We can help you understand your financial situation. We’ll identify what actions, if any, you need to take to qualify for a mortgage. Every lender’s formula is different – but these steps consistently make applications stronger. If you’d like help modelling your own numbers, get in touch and we’ll show you what’s possible.
Angela is an accredited Financial Adviser, licensed under FSP742251 and has been in the Financial Industry since 2006. Our 5-star Google reviews reflect the excellent customer experience we promise — making your home loan journey positive, stress-free, and rewarding. At Platinum Mortgages, our clients are the reason we exist — so you can be confident every step is guided by genuine care and expertise.
Credit card debt is common in New Zealand. Many first-home buyers are surprised by how credit limits and repayment history impact borrowing power. This article explains how credit card debt affects mortgage affordability in NZ. It also shows ways to improve your borrowing power.
Lenders calculate debt-to-income (DTI) ratio when you apply for a mortgage. This is the percentage of your gross monthly income that goes towards paying your debts.
Lenders don’t just look at your current balance. They look at your limit. They don’t know what you’ll spend on your credit card month to month. Therefore, they assume your full limit is used and interest applied. At approximately 18%, high limits can significantly reduce your borrowing power.
To instantly improve your DTI, reduce your credit card limit as much as possible and reduce overdraft or buy-no-pay later facilities.
Read about why the bank might not approve your loan, and what you can do next.
Your credit score is another factor lenders consider when deciding to approve a mortgage. High balances and missed payments can lower your score and signal higher lending risk.
New Zealand’s credit culture has been further pressured by the increased cost of living and higher credit card interest rates, leading some into further debt.
Many borrowers will recover as the economy improves. However, rebuilding credit takes time and consistent financial discipline.
If credit card debt is limiting what banks will lend, there are still solutions. We work with non bank lenders – see our full non bank lending services page. They focus more on your current situation than your past, offering approvals in exchange for slightly higher interest rates.
Platinum Mortgages specialises in helping clients get approvals, even with debt. In the end, managing credit-card debt and mortgage affordability in NZ often comes down to balancing your credit limits, repayment conduct, and lender choice.
Here are some practical ways to improve your affordability before applying again:
Confronting your debt can be challenging, but the right lender can make all the difference. At Platinum Mortgages, we specialise in connecting clients with lenders who take a more flexible approach to assessing applications. That means even if credit card debt has reduced what the banks are willing to offer, there are still ways forward.
Before you decide, see our balanced guide on the pros and cons of non bank lenders so you can weigh costs, timing and the refinance plan.
Our non bank lending pathways are designed to give you choices that the banks can’t.
If you want a mortgage and are concerned about your debt, you don’t need to find the answers alone. We can help you understand your financial situation. We’ll identify what actions, if any, you need to take to qualify for a mortgage. Every lender’s formula is different – but these steps consistently make applications stronger. If you’d like help modelling your own numbers, get in touch and we’ll show you what’s possible.
Angela is an accredited Financial Adviser, licensed under FSP742251 and has been in the Financial Industry since 2006. Our 5-star Google reviews reflect the excellent customer experience we promise — making your home loan journey positive, stress-free, and rewarding. At Platinum Mortgages, our clients are the reason we exist — so you can be confident every step is guided by genuine care and expertise.
