How much deposit do you need to buy a house in NZ?

How much deposit do you need to buy a house in New Zealand?

Twenty percent of the purchase price is the figure most banks work to for an existing home. It is not a law and it is not a minimum, but it is the level at which a bank's lending is unrestricted, so it is the number you will be quoted most often.

Lower deposits do get approved. Banks are allowed to do a limited share of their new lending to borrowers with less, and some government-backed lending sits outside the limits entirely, including the Kāinga Ora First Home Loan which is designed around a 5 percent deposit.

Deposit is only half the question. A lender also has to be satisfied you can afford the repayments, so a large deposit does not by itself guarantee approval, and neither does a high income with a small deposit.

What does LVR mean?

LVR stands for loan-to-value ratio. It is the size of the loan expressed as a percentage of the property's value, so it is simply the mirror image of your deposit.

If a house costs $700,000 and you have a $140,000 deposit, you are borrowing $560,000. That is 80 percent of the value, so the LVR is 80 percent and the deposit is 20 percent. A $70,000 deposit on the same house would be a 90 percent LVR. Whenever you see a rule written about lending above 80 percent LVR, it is a rule about deposits under 20 percent.

What are the Reserve Bank's LVR restrictions?

The Reserve Bank sets a speed limit on how much low-deposit lending a bank can do. It is a cap on the bank's overall book, not a ban on any individual borrower, which is why low-deposit loans exist but are competed for.

The settings that took effect on 1 December 2025 allow banks to write no more than 25 percent of new owner-occupier lending at an LVR above 80 percent, and no more than 10 percent of new investor lending at an LVR above 70 percent. The Reserve Bank's Financial Policy Committee reviewed these at its August 2026 macroprudential review and left them unchanged.

Two things follow from the wording. The limits apply to new lending, not retrospectively to loans you already have, and banks still apply their own credit criteria on top, so a bank may decline a loan the rules would have permitted.

• Owner-occupiers: no more than 25 percent of a bank's new lending may have an LVR above 80 percent
• Investors: no more than 10 percent of a bank's new lending may have an LVR above 70 percent
• In force since 1 December 2025, maintained at the August 2026 review

Are there exceptions to the LVR rules?

Yes. The Reserve Bank publishes a list of lending the LVR restrictions do not apply to, and new builds and government-backed first-home lending are on it. The same exemptions apply to the debt-to-income restrictions.

Debt-to-income restrictions are the other Reserve Bank limit worth knowing about, because they can bite even when your deposit is fine. Since 1 July 2024, banks may write no more than 20 percent of new owner-occupier lending to borrowers whose total debt is more than six times their gross annual income, and no more than 20 percent of new investor lending above seven times income. These rules apply to bank lending, not to non-bank lenders.

• Kāinga Ora loans, including First Home Loans
• Refinancing, where the new loan does not exceed the original loan value
• Portability, where a loan moves from one property to another without increasing
• Bridging finance
• Property remediation, for example fixing a leaky home
• Construction loans, including buying a newly built home from the developer within six months of completion

Can you use KiwiSaver for your first-home deposit?

Yes, if you have been a KiwiSaver member for at least three years. A first-home withdrawal lets you take out your own contributions, your employer's contributions, the Government contributions and the investment returns on all of it.

Two amounts have to stay behind. You must leave at least $1,000 in the account, and any money you transferred in from an Australian complying superannuation scheme cannot be withdrawn.

The withdrawal is normally for your first home. If you have owned property before, Kāinga Ora can in some cases determine that you are in a position similar to a first-home buyer, which opens the withdrawal back up. Applications go through your KiwiSaver provider, with Kāinga Ora involved where an eligibility determination is needed, so start the paperwork well before you need the money.

What government help is available for first-home buyers?

Less than there used to be, and the schemes have changed recently enough that older articles are unreliable. The First Home Grant, which paid up to $10,000 towards a first home, finished in May 2024 and is no longer available. First Home Partner, a shared ownership scheme, is full and is not accepting new applications.

The First Home Loan is still running. It is underwritten by Kāinga Ora and offered through participating lenders, and it lets an eligible buyer borrow with a 5 percent deposit. Income caps and other eligibility criteria apply, and because those criteria are reviewed from time to time, check the current numbers on the Kāinga Ora website rather than relying on a figure quoted anywhere else.

Two narrower schemes also still exist. A Kāinga Ora tenant may be eligible for the Tenant Home Ownership Grant, a gift of 10 percent of the purchase price up to a maximum of $20,000. The Kāinga Whenua Loan is for Māori buying or building on multiple-owned Māori land.

• First Home Loan: 5 percent deposit, underwritten by Kāinga Ora, income caps apply
• KiwiSaver first-home withdrawal: after three years of membership, leaving $1,000 behind
• Tenant Home Ownership Grant: Kāinga Ora tenants only, 10 percent of the price up to $20,000
• Kāinga Whenua Loan: for building or buying on multiple-owned Māori land
• First Home Grant: ended May 2024, no longer available
• First Home Partner: closed to new applications

Does a bigger deposit change anything other than getting approved?

It changes what the loan costs you. A bigger deposit means a smaller loan, and a smaller loan means less interest over the whole term even if the interest rate is identical.

Lenders also commonly price low-deposit lending differently from lending under 80 percent LVR, either as a margin added to the interest rate or as a one-off low-equity fee. The names, the thresholds and the amounts vary from lender to lender, so ask for the specific figure in writing rather than assuming.

Saving longer for a larger deposit has its own cost if house prices are moving, and neither direction is automatically right. That is a decision about your own circumstances, and a licensed mortgage adviser can work it through with your actual numbers.