How much deposit do I really need to buy a Home in NZ?

How Much Deposit Do I Need to Buy a Home in NZ? 5%, 10% & 20% Explained

For many Kiwis, buying a home feels like climbing a mountain — and one of the steepest parts? Saving for the deposit. You’ve probably heard the magic numbers: 10%, 20%, or even 5%. But what do those really mean?

Let’s break it down.

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

For many first-home buyers, the deposit feels like the biggest hurdle.

You’ve probably heard that you need a 20% deposit to buy a home. While 20% can make things easier, it isn’t a hard rule. Depending on your circumstances, buying with a 10% or even 5% deposit may be possible.

So what does each option actually mean?

What is a house deposit?

Your deposit is the portion of the purchase price that comes from you rather than the bank.

For example, if you’re buying a $600,000 home:

• 20% deposit = $120,000
• 10% deposit = $60,000
• 5% deposit = $30,000

Your deposit might come from savings, KiwiSaver, a family gift, or a combination of these.

Can I buy a home with a 5% deposit?

Potentially.

One option for eligible first-home buyers is the Kāinga Ora First Home Loan, which allows a minimum deposit of 5%. First Home Loans are provided by selected lenders and underwritten by Kāinga Ora.

There are eligibility requirements. Currently, your before-tax income for the previous 12 months needs to be no more than $95,000 for an individual buyer without dependants, or $150,000 for an individual with dependants or for two or more buyers combined. You also need to meet the participating lender’s normal lending criteria.

There is no longer a house-price cap for First Home Loans.

A 1.2% Lender’s Mortgage Insurance premium also applies, which can generally be paid upfront or added to the loan.

What about a 10% deposit?

You don’t necessarily need to qualify for a First Home Loan to purchase with less than 20%.

Banks can approve some owner-occupier lending above 80% LVR, although the criteria can be tighter and the options vary considerably between lenders. You may also face a low-equity fee, margin or higher interest rate until you build more equity. The Reserve Bank’s current rules still allow banks to do a proportion of their owner-occupier lending above 80% LVR.

This is one of the areas where talking to an adviser early can make a real difference. A 10% deposit that doesn’t work with one lender may be perfectly workable with another.

Can I use KiwiSaver for my deposit?

For many first-home buyers, yes.

If you’ve been a KiwiSaver member for at least three years, you may be able to withdraw most of your KiwiSaver balance to help buy your first home. At least $1,000 needs to remain in your KiwiSaver account, and the property generally needs to be one you intend to live in.

That can make a significant difference to how quickly you reach a usable deposit.

What if my family can help?

A gift from parents or other family members can sometimes form part of your deposit too.

There are also situations where parents can use equity in their own property to help a first-home buyer. The right structure depends on the family’s circumstances, so it’s worth working through this before making an offer rather than trying to put it together afterwards.

So, is a 20% deposit still better?

If you can get to 20%, there are advantages.

You’ll generally have access to a wider range of lending options, may avoid low-equity costs and have more protection against changes in property values.

But waiting until you have 20% isn’t automatically the best decision.

If you already have 5% or 10%, good income and the ability to comfortably service the mortgage, it’s worth finding out what is possible now rather than assuming you need to spend another few years saving.

Your deposit isn't the only thing the bank looks at

Having enough deposit doesn’t automatically mean you’ll be approved.

Lenders will also look at your income, existing debts, regular expenses, credit history and whether the proposed mortgage is affordable. With a smaller deposit, these parts of the application can become even more important.

That’s why we’d rather look at the full picture than simply tell you to “save more”.

How EasyStreet can help

At EasyStreet, we regularly help first-home buyers in Christchurch and around New Zealand work through low-deposit options.

We can look at your deposit, KiwiSaver, income and existing commitments, work out what you can realistically afford, and identify which lenders are most likely to suit your situation.

If you’re not ready yet, that’s fine too. We can tell you what needs to change and give you a clear plan to get there.

You might be closer than you think

If you have 5%, 10% or somewhere in between, don’t assume you need to wait until you reach 20%.

The easiest way to find out is to run the numbers.

Talk to EasyStreet about your first-home options — no pressure, no judgement. Just a clear picture of where you stand and what your next move could be.