How Much Deposit Do You Need?
The amount of deposit you need depends on whether you're buying an existing home or a new build, and whether you qualify for low-deposit lending.
- Existing homes: Usually 20% deposit needed. With low-deposit lending (restricted), 10–15% may be possible
- New builds: Often 10–15% deposit, sometimes 5% with strong application
- With First Home Grant: As low as 5% deposit is possible
What is LVR (Loan-to-Value Ratio)?
LVR is the loan amount as a percentage of the property value. A $600,000 home with a $540,000 loan = 90% LVR (10% deposit).
- Low LVR (≤80%): 20%+ deposit — easiest approval, best rates
- Medium LVR (80–90%): 10–20% deposit — possible but limited
- High LVR (>90%): Less than 10% deposit — restricted by RBNZ rules
RBNZ LVR Restrictions (2026)
The Reserve Bank of NZ limits how many high-LVR loans banks can issue:
- Existing homes: Banks can only lend up to 10% of new lending above 80% LVR
- New builds: Exempt from LVR restrictions — easier to get a low-deposit loan
- This means low-deposit lending is competitive — having a strong application helps
Low Deposit Loan Options
1. First Home Grant + KiwiSaver
With the First Home Grant providing up to $20,000 (new build) and KiwiSaver withdrawal providing tens of thousands more, many first home buyers can reach a 10% or even 5% deposit.
2. Welcome Home Loan (if available)
The old Welcome Home Loan scheme has been replaced by First Home Partner and First Home Grant. Check with Kāinga Ora for current options.
3. Low Deposit Pre-Approval
Some banks will consider pre-approval at 10% deposit for first home buyers with strong income and good credit history. Talk to a mortgage broker.
Practical Saving Strategies
- KiwiSaver contributions: Contribute at least 3% to maximise employer match and Government Contribution
- First Home Saver accounts: Some banks offer dedicated savings accounts with bonus interest
- Cut discretionary spending: Track your spending for 3 months and identify savings
- Side income: Consider flatting, renting a room, or a second job during your saving phase
- Gifted deposits: Family can gift you money for a deposit — banks need a "gift letter" confirming it's not a loan
Example Deposit Calculation
For an Auckland home at $800,000:
- 5% deposit: $40,000
- 10% deposit: $80,000
- 20% deposit: $160,000
With $40,000 from KiwiSaver + $10,000 First Home Grant + $30,000 savings, you could reach $80,000 (10% deposit) with relative confidence.