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 the First Home Loan: As low as 5% deposit is possible if you meet the income and price caps
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 lend up to 25% of new lending above 80% LVR (raised from 20% on 1 December 2025)
- 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 Loan + KiwiSaver
The First Home Loan cuts the required deposit to 5% for buyers within its income caps ($95,000 single, $150,000 combined), and a KiwiSaver first-home withdrawal can supply tens of thousands more. Together, many first home buyers can reach a 10% or even 5% deposit. The First Home Grant no longer exists — it closed on 22 May 2024.
2. Low-deposit bank lending
Banks may now write 25% of new owner-occupier lending above 80% LVR, up from 20% on 1 December 2025, so a 10–15% deposit is realistic for strong applications. New builds are exempt from LVR restrictions entirely.
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 3.5% (the default rate from 1 April 2026) to maximise employer match and the 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.
2026 Reality Check: The Grant Is Gone
One of the biggest changes in recent years is that the Kāinga Ora First Home Grant no longer exists — it was discontinued on 22 May 2024. Buyers who planned on a $10,000–$20,000 grant need to rebuild their deposit plan around KiwiSaver withdrawals, savings, and low-deposit lending instead.
The good news is that the median house price has been broadly stable. REINZ recorded a national median of around $787,000 in December 2025 and about $770,000 in mid-2026, with regional medians ranging from roughly $620,000 in Taranaki to over $1 million in Auckland. Flat prices give savers time, but you still need a plan.
RBNZ LVR and DTI Rules in 2026
The Reserve Bank's speed limits shape what deposits are realistic. From 1 July 2024, banks can only lend 20% of new owner-occupier lending above 80% LVR (i.e., with a deposit below 20%), and new builds are exempt from LVR restrictions entirely — which is why 10–15% deposits are common on new homes.
Debt-to-income (DTI) speed limits also apply from 1 July 2024: banks may only write 20% of owner-occupier lending to borrowers with debt above 6 times gross income (7 times for investors). In practice this means your borrowing is capped by income as well as deposit — a couple earning $150,000 combined would generally top out near $900,000 of debt, before lender serviceability checks.
Deposit Maths at 2026 Prices
- 20% deposit on a $770,000 median home: $154,000 — the conventional target for existing homes.
- 10% deposit: $77,000 — achievable on many new builds and via low-deposit lending.
- 5% deposit: $38,500 — possible under the Kāinga Ora First Home Loan if you meet the income and price caps.
- KiwiSaver boost: a couple with 6–8 years of membership can often withdraw $50,000–$90,000 combined toward that deposit.
A Saving Plan That Works in 2026
- Maximise your KiwiSaver: contribute at least $1,042.86 a year to earn the full $260.72 government contribution, and consider 4%+ if you can afford it.
- Open a dedicated first-home savings account with automatic transfers — lenders want to see a consistent saving pattern.
- Track spending for three months to find $200–$400 a month of savings; that adds up to $2,400–$4,800 a year.
- Check whether you qualify for the First Home Loan (5% deposit) so your target deposit number is realistic.
- Remember the extra costs: solicitor ($1,000–$2,500), building report ($500–$900), LIM ($250–$400), valuation ($600–$1,000) and insurance.
LVR Settings Changed on 1 December 2025
If you have read older advice, this is the number to update. From 1 December 2025 the Reserve Bank allows banks to write 25% of new owner-occupier lending to borrowers with an LVR above 80% — up from the 20% limit that applied from July 2024, and well above the 10% limit that applied from 2021. Investor lending above 70% LVR was raised to 10% at the same time. The Reserve Bank maintained these settings at its August 2026 review.
What that means for you is straightforward: low-deposit lending is more available than it has been in five years, but it is still a share of a bank's book rather than an entitlement. Banks allocate that headroom to the strongest applications, which is why a 10% deposit with a stable income, clean credit history and genuine savings record gets approved while the same deposit with erratic income does not. New builds remain exempt from LVR restrictions entirely.
Deposit by Buyer Type: The 2026 Numbers
| Scenario | Deposit needed | On a $770,000 national median home |
|---|---|---|
| Existing home, standard lending | 20% | $154,000 |
| Existing home, low-deposit lending (LVR headroom) | 10–15% | $77,000–$115,500 |
| New build (LVR-exempt) | 10% or less | from $77,000 |
| First Home Loan (Kāinga Ora, income-capped) | 5% | $38,500 |
The swing between 20% and 5% is worth naming: on that median home the First Home Loan saves you $115,500 of upfront cash, which is a much bigger deal than any grant ever was. It comes with income caps — $95,000 for a single buyer with no dependants, and $150,000 combined for two or more buyers — plus regional price caps, so check the current schedule against the property you want.