How Much Deposit Do You Need to Buy a Home in NZ?

Buying your first home is an exciting step, but for many New Zealanders, the biggest challenge is saving the deposit. It’s often the difference between thinking about buying and actually getting pre-approved. But how much do you really need? Is 20 percent always required? Can you buy with 10 percent, or even less?

The answer depends on your financial position, which lender you choose, and whether you qualify for special schemes like the First Home Loan. At Luminate Financial Group, we work with first-home buyers across the country every day, helping them understand the real deposit requirements and how to structure their finances to get into a home sooner.

This guide explains the minimum deposit rules, low-deposit options, and the benefits of aiming for a larger deposit.

What’s the Standard Deposit Requirement?

For most buyers, the standard deposit required by New Zealand’s major banks is 20 percent of the purchase price. If you’re looking to buy a $700,000 home, that means you’ll need to contribute $140,000 of your own funds, either from savings, KiwiSaver, or a gifted deposit.

Why 20 percent? Banks prefer this level of equity because it reduces their lending risk. Borrowers with less than 20 percent are considered “high LVR” (loan-to-value ratio), which means additional conditions may apply.

Can You Buy With Less Than 20 Percent?

Yes. Many first-home buyers in New Zealand are purchasing homes with just 10 percent deposit, and sometimes even less. However, you need to meet specific criteria or use certain products. Here are the most common ways this is done:

1. Kāinga Ora First Home Loan

This government-backed scheme allows eligible first-home buyers to purchase with as little as 5 percent deposit. The loan is issued by participating lenders (such as selected banks and credit unions) and underwritten by Kāinga Ora. To qualify, you must meet income caps, be buying a property under the regional price cap, and not already own a home.

Example: A couple with a combined income of $130,000 could qualify to purchase a home for $600,000 using just $30,000 deposit (5 percent), as long as the property meets Kāinga Ora requirements.

2. Bank Low-Deposit Products

Some banks offer 90 percent loans (requiring a 10 percent deposit) to borrowers with strong incomes and good account conduct. These loans often come with higher interest rates, and the lender may charge a “low equity premium” or adjust the loan structure to manage risk.

3. Family Gifting or Guarantors

In many cases, first-home buyers get help from parents or family members. This can be a cash gift (which doesn’t need to be repaid) or a guarantee secured against the parent’s property. A letter confirming that the funds are a non-repayable gift is usually required.

4. Non-Bank Lenders

Non-bank or alternative lenders are often more flexible with deposit requirements, especially for buyers who are self-employed, have credit history issues, or are buying unusual properties. However, they may charge higher interest rates or fees and may require a larger income buffer.

How Much Is That in Dollars?

Let’s break down what a deposit looks like for different purchase prices:

Even with KiwiSaver, that’s a lot of money to save — but it becomes more achievable when you know what you’re working toward and have a clear plan.

What Counts Toward Your Deposit?

When banks talk about deposit, they mean your equity in the property — how much you’re contributing upfront. This can include:

• KiwiSaver first-home withdrawal: You can withdraw most of your KiwiSaver balance to put toward your deposit, as long as you meet the eligibility rules and have contributed for at least three years.
• Cash savings: Any personal savings or term deposits held outside of KiwiSaver.
• Gifts from family: These must be documented and confirmed as non-repayable.
• Equity in another property: Rare for first-home buyers, but relevant in some family purchase structures.

You cannot use credit cards, personal loans, or other borrowed money as part of your deposit unless it’s declared and accepted by the lender — which usually reduces how much you can borrow overall.

Why a Larger Deposit Is Better (If You Can Wait)

While you can get into the market with 5 or 10 percent deposit, there are some clear benefits to saving 20 percent or more:

1. Better interest rates: Banks usually reserve their best pricing for low-risk borrowers with 20 percent or more equity.
2. Lower repayments: The more you contribute upfront, the less you have to borrow — and the lower your monthly repayments will be.
3. No low equity fees or margins: Avoid extra charges added to your interest rate or loan balance.
4. Stronger application: A higher deposit can offset other issues, like short employment history or higher living expenses.
5. More resilience: If property values fall or your circumstances change, having more equity gives you more options.

Still, it may not make sense to delay buying for several years just to reach 20 percent. In some cases, buying sooner with 10 percent and benefiting from price growth may be the smarter move — especially if you’re in a rising market.

How to Grow Your Deposit Faster

If you’re just starting your deposit savings journey, here are a few tips to make progress faster:

• Automate your savings: Set up a direct debit into a separate high-interest savings account each payday.
• Use KiwiSaver effectively: Make sure your contributions are high enough to grow your balance while still receiving employer and government contributions.
• Reduce or clear short-term debts: Less debt means better borrowing power and fewer interest payments.
• Set a specific goal: Knowing exactly what you need for a 10 or 20 percent deposit keeps you focused.
• Track your spending: Small changes to lifestyle spending can free up hundreds per month to add to your deposit fund.

Final Thoughts

There’s no magic number when it comes to how much deposit you need to buy a home in New Zealand. Some buyers can get in with 5 or 10 percent, especially through schemes like the Kāinga Ora First Home Loan. Others choose to wait and save 20 percent to access better loan terms and avoid extra fees.

The key is to understand your options, know what’s realistic based on your income and location, and make a plan. At Luminate, we work with first-home buyers to assess their deposit strategy, check eligibility for government support, and compare lenders to find the right fit.

Want to know how close you are to your deposit goal?

Book a free First-Home Deposit Strategy Session with Luminate.
We’ll help you check your KiwiSaver eligibility, run the numbers, and build a custom savings plan so you can get your deposit sooner and smarter.

Visit www.luminate.co.nz | Email askus@luminate.co.nz | Call 0800 333 400