Your incomes are usually combined
When both partners are named on the home loan, New Zealand lenders generally assess your combined household income rather than treating each salary separately. A joint application is standard for couples buying together, and lenders expect both applicants to live in the home and share expenses.
That means a second salary does not simply double the number — but it does give the lender a larger pool of reliable income to test the repayment against. Overtime, bonuses and commission are usually treated more cautiously than base salary, and self-employed income normally needs a history behind it.
Source: ANZ: how we calculate a home loan indicative approval; BNZ: demystifying the home loan application process
What the lender takes off before it decides
Banks assess what is left of your household income after your regular spending and your existing commitments. That includes day-to-day living costs, any personal loans or car finance, and other debts you are already carrying.
Two details often surprise couples. Credit cards are counted on the limit, not the balance — so a card you clear every month still reduces what you can borrow. Buy-now-pay-later accounts and student loan repayments come off your usable income as well.
It is why a second good salary can be partly offset by the couple's combined expenses and debts. The lender is testing the household, not each person.
The test rate is higher than the rate you would pay
When lenders check whether your household can afford the repayment, they do not use today's advertised rate. They apply a higher internal servicing or stress-test rate, so they can see whether you would still cope if interest rates rose during the life of the loan.
Every lender sets its own test rate and reviews it over time, so the exact figure differs between banks and changes as economic conditions move.
The practical effect is that the repayment a household can comfortably carry supports a smaller loan at the test rate than at the advertised rate. It is one reason an approved figure can come back lower than expected, even with two solid incomes.
Source: interest.co.nz: how New Zealand banks set their serviceability test rates
Debt-to-income limits can also cap the loan
Alongside affordability, the Reserve Bank sets debt-to-income (DTI) restrictions on bank home lending. These limit the share of new lending a bank can provide to borrowers whose total debt is already large relative to their annual gross income — for both owner-occupiers and investors.
The restrictions are calculated on your household's total debt, including the mortgage you are applying for, compared with your combined gross (before-tax) income. Banks also apply their own affordability assessments on top.
So a two-income household is usually measured the same way as a single borrower: by what the combined income can service, and how the combined debt compares to the combined income.
Source: Reserve Bank of New Zealand: debt-to-income restrictions explained; BNZ: understanding debt-to-income ratios
Common questions
We both work full-time — how much can we borrow?
It depends on your combined income, your regular spending, any debts or credit card limits, your dependants and your deposit. There is no single figure that applies to every two-income household. The free borrowing check on this site (Start the borrowing check, above) combines both incomes and shows your indicative borrowing power in a few minutes. It is an estimate only, not pre-approval.
Do both of our incomes count if only one of us is on the loan?
Lenders generally assess the borrowers named on the loan. If only one person is the borrower, it is normally that person's income and situation that is assessed. Many couples put both names on the loan so both incomes can be considered, but the right structure depends on your circumstances.
Should we close our credit cards before applying?
Credit card and buy-now-pay-later limits are usually counted against you even when you owe nothing on them, because the lender assumes you could draw on them. Reducing unused limits before you apply can improve the assessed position, but talk to a lender or a licensed adviser before closing accounts, as account history can also matter.