Learn More From
This Blog.
How Much Deposit Do You Need to Buy a House in NZ?
The deposit is the first question almost every first home buyer asks — and for good reason. It determines how quickly you can enter the market, what loan options are available to you, and what your repayments will look like. The short answer is: the standard requirement is 20%, but there are legitimate pathways to buy with less.
The Standard 20% Deposit (80% LVR)
New Zealand's main banks generally want to see a 20% deposit for a standard home loan. This is tied to the Reserve Bank's LVR (Loan-to-Value Ratio) rules, which limit how much high-LVR lending banks can do. A 20% deposit puts you in the lowest-risk category for lenders, meaning you'll usually access the best interest rates and the broadest range of loan products.
To put that in dollar terms:
- $600,000 home → $120,000 deposit required
- $750,000 home → $150,000 deposit required
- $900,000 home → $180,000 deposit required
For many Kiwis, saving that amount takes years. That's why the low-deposit options below matter so much.
Low-Deposit Options: 10% Deposit
Under RBNZ rules, banks are allowed to lend a portion of their book to owner-occupiers with deposits as low as 10% (90% LVR). This is sometimes called a low-equity loan. The trade-off is that lenders typically charge a Low Equity Premium (LEP) — an interest rate margin of 0.25%–0.75% that applies until your equity reaches 20%. On a $700,000 loan, that can add around $1,750–$5,250 per year to your repayments, so it's worth factoring in.
Not every bank will approve 10% deposit loans at any given time — their internal caps fill up. This is where a broker becomes particularly valuable, because they know which lenders currently have capacity.
The 5% Deposit Pathway via Kāinga Ora
The First Home Loan scheme, administered by Kāinga Ora and offered through select lenders (including Westpac, Kiwibank, Co-operative Bank, and some non-bank lenders), allows eligible first home buyers to purchase with just a 5% deposit. Kāinga Ora underwrites the mortgage above 80% LVR, which reduces the risk to the lender.
To be eligible in 2026, you generally need to:
- Be a first home buyer (or have not owned a home in the last few years)
- Meet household income caps (currently $95,000 for a single buyer, $150,000 for multiple buyers)
- Purchase within regional house price caps (e.g., up to $875,000 in Auckland)
- Intend to live in the property (not an investment)
A 5% deposit on a $750,000 home is just $37,500 — a figure many buyers can reach through a combination of savings and KiwiSaver.
Using KiwiSaver as Part of Your Deposit
If you've been contributing to KiwiSaver for at least three years, you can withdraw most of your balance to put toward your deposit. The only requirement is that you leave $1,000 in your account. For many buyers, this is the single most impactful thing they can do to accelerate their purchase timeline.
For example, a 30-year-old who's been contributing since they started work at 22 might have $40,000–$60,000 in KiwiSaver. Combined with other savings, this can make up a significant portion of a 10% or even 20% deposit on a mid-range property.
First Home Grant: Up to $10,000 Extra
The First Home Grant provides up to $5,000 for purchasing an existing home, or up to $10,000 for a new build, based on your years of KiwiSaver contributions. Income and house price caps apply (the same as the First Home Loan scheme), but if you're eligible, this is essentially free money toward your deposit.
Gifted Deposits
It's increasingly common for parents or family members to gift part of a deposit. Most banks will accept gifted deposits, but they'll want a signed statutory declaration from the gift giver confirming it's a genuine gift (not a loan). If it's actually a loan, even an informal one, the bank needs to know — it affects your debt-to-income ratio and serviceability assessment.
How to Calculate What You Need
Start with your target price range, then work backwards:
- 5% deposit: achievable via Kāinga Ora First Home Loan if eligible
- 10% deposit: available at most main banks with a Low Equity Premium
- 20% deposit: best rates, most options, no LEP
Add your KiwiSaver balance, any First Home Grant entitlement, and your savings — that total is your working deposit figure. If there's a gap, a broker can help you model different scenarios and timelines.
Understanding your deposit options is the foundation of your home ownership journey. Whether you're working toward 5% or 20%, there are real pathways available. The team at Kiwi Mortgages can run the numbers with you and help you build a plan that works for your situation — book a free consultation at kiwimortgages.co.nz.
