The most common question from aspiring NZ home buyers is: how much deposit do I actually need? The answer depends on which lending route you take, where you’re buying, and whether you qualify for any government support.
This guide covers every scenario clearly.
The Standard Rule: 20% Deposit
For most New Zealand home buyers, the standard deposit requirement is 20% of the purchase price. This corresponds to an 80% loan-to-value ratio (LVR) — meaning the bank lends 80% and you contribute 20%.
The 20% figure comes from the Reserve Bank of NZ’s (RBNZ) LVR restrictions, which limit how much banks can lend to high-LVR (low deposit) borrowers.
Deposit required at 20% by property price
| Property price | 20% deposit |
|---|---|
| $500,000 | $100,000 |
| $600,000 | $120,000 |
| $700,000 | $140,000 |
| $800,000 | $160,000 |
| $900,000 | $180,000 |
| $1,000,000 | $200,000 |
| $1,100,000 | $220,000 |
For most first home buyers in Auckland or Wellington, where median prices sit above $850,000, the 20% deposit target is $170,000 or more. That’s a significant savings challenge — particularly while paying rent.
Buying with Less Than 20%: Your Options
Banks are allowed to lend a limited proportion of their new lending above 80% LVR (to owner-occupiers). But this lending is constrained and typically comes at a rate premium unless you’re using the First Home Loan.
Option 1: First Home Loan (5% deposit)
The Kāinga Ora First Home Loan allows eligible buyers to purchase with as little as 5% deposit without paying the rate premium that normally applies to high-LVR loans.
5% deposit required by property price:
| Property price | 5% deposit |
|---|---|
| $500,000 | $25,000 |
| $600,000 | $30,000 |
| $650,000 | $32,500 |
| $700,000 | $35,000 |
| $750,000 | $37,500 |
| $875,000 (Auckland cap) | $43,750 |
Eligibility requires: income ≤ $95,000 (single) or $150,000 (combined), not currently owning property, and the purchase price within Kāinga Ora’s regional caps.
See the First Home Loan guide for eligibility details.
Option 2: Standard high-LVR lending (10–19% deposit)
Banks can lend to buyers with 10–19% deposits under RBNZ rules — but only a limited volume of this lending is allowed (currently 15% of new owner-occupier lending can be above 80% LVR). Competition for this allocation is strong, and banks typically require strong credit profiles.
Key difference from First Home Loan: Standard high-LVR lending usually comes with a rate premium of 0.25%–0.75% added to the regular rate. Over a 25-year loan on $700,000, even 0.25% extra costs approximately $35,000 in additional interest.
10% deposit required by property price:
| Property price | 10% deposit |
|---|---|
| $500,000 | $50,000 |
| $600,000 | $60,000 |
| $700,000 | $70,000 |
| $800,000 | $80,000 |
| $900,000 | $90,000 |
Including KiwiSaver in Your Deposit
After 3 years of KiwiSaver membership, most first home buyers can withdraw most of their balance as part of their deposit. This can significantly close the gap to 20%.
Example:
- Target purchase: $700,000 (20% deposit = $140,000)
- Buyer 1 KiwiSaver balance: $42,000 (can withdraw $41,000)
- Buyer 2 KiwiSaver balance: $38,000 (can withdraw $37,000)
- Combined KiwiSaver: $78,000
- Additional savings needed: $62,000
With KiwiSaver, the savings target drops from $140,000 to $62,000 — a dramatically more achievable number.
Using the First Home Loan with the same KiwiSaver amounts:
- Minimum deposit (5%): $35,000
- Combined KiwiSaver: $78,000
- Deposit already covered — plus $43,000 remaining for additional deposit
This is why KiwiSaver is so important for first home buyers. See Using KiwiSaver for Your First Home.
Does Deposit Size Affect Your Interest Rate?
Yes — materially.
| Deposit | LVR | Rate impact |
|---|---|---|
| 20%+ | ≤80% | Standard rate (no loading) |
| 10–19% (First Home Loan) | 81–95% | Standard rate (scheme protects you) |
| 10–19% (standard high-LVR) | 81–90% | +0.25%–0.75% rate loading |
| <10% | >90% | Very limited availability; significant loading |
With a $700,000 loan, a 0.5% rate loading adds approximately $3,500/year or $87,500 over a 25-year term. Getting to 20% isn’t just a regulatory hurdle — it saves real money.
Deposit by City: How Long Does It Take to Save?
Assuming you can save $1,500/month (after rent and living costs):
| City | Median price | 20% deposit | Saving time (alone) | 5% deposit | Saving time (alone) |
|---|---|---|---|---|---|
| Auckland | $1,000,000 | $200,000 | 11+ years | $50,000 | 33 months |
| Wellington | $800,000 | $160,000 | 9 years | $40,000 | 27 months |
| Christchurch | $700,000 | $140,000 | 8 years | $35,000 | 23 months |
| Hamilton | $700,000 | $140,000 | 8 years | $35,000 | 23 months |
| Tauranga | $800,000 | $160,000 | 9 years | $40,000 | 27 months |
| Dunedin | $600,000 | $120,000 | 7 years | $30,000 | 20 months |
KiwiSaver withdrawals can significantly reduce these timelines.
The message: in Auckland, saving a 20% deposit alone while renting is a decade-long project. The First Home Loan’s 5% option — combined with KiwiSaver — transforms the timeline.
What Counts Towards Your Deposit?
Banks accept the following as deposit:
- Cash savings — bank accounts, term deposits
- KiwiSaver withdrawal — once your application to your provider is approved
- Gifted money — from family, with a statutory declaration that it’s not a loan
- Equity in another property — if refinancing or selling
- Proceeds from a sold asset (shares, vehicle, etc.) — must be documented
Banks do not generally accept:
- Money borrowed from another person (unless formally structured as a second mortgage the bank knows about)
- “Borrowed” money from credit cards or personal loans
- Vendor finance without disclosure
Next Steps
Once you know your deposit target:
- Saving for a House Deposit NZ — how to reach your target faster
- First Home Loan (Kāinga Ora) — 5% deposit eligibility and process
- Using KiwiSaver for Your First Home — accessing your KiwiSaver balance
- Can I Afford a House in NZ? — income and borrowing capacity
- LVR Restrictions NZ — the RBNZ rules behind deposit requirements