Everything first-home buyers need to know about deposits in New Zealand this year
TL;DR
In 2025, most first-home buyers in NZ will need a 10–20% deposit depending on the type of property and lender. Some government-backed loans may allow deposits as low as 5%. This post breaks it all down with real examples and next steps. Most property investors will need a 20-30% deposit.
Why Your Deposit Matters
In New Zealand, your deposit is one of the key criteria banks use when deciding whether to approve your mortgage. Along with your income and debt levels, your deposit affects:
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- How much you can borrow
- What interest rate you’re offered
- Whether you’ll need to pay a Low Equity Premium (LEP)
How Much Deposit Do First-Home Buyers and Investors Need in New Zealand?
Let’s get specific. Here’s what’s typical in 2025:
| Property Type | Typical Deposit |
|---|---|
| New Build (Owner-Occupied) | 10% |
| Existing Property (Owner-Occupied) | 20% |
| Investment Property (New Build) | 20% |
| Investment Property (Existing) | 30% |
Can You Buy a House With 5% Deposit in NZ?
Yes — first-home buyers may qualify for loans with as little as 5% deposit through:
Kainga Ora First Home Loan
This government-backed program is one of the few ways to buy a house in NZ with a 5% deposit, making it ideal for low-to-moderate income first-home buyers.
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- Government-backed mortgage product
- Only requires a 5% deposit
- Income caps apply
- Property price caps apply
- Must be your first home (or in a similar financial situation)
- Learn more about it here
Conditions to Note:
- Most banks charge a Low Equity Premium (LEP) if your deposit is under 20%
- LEP can add 0.25% to 1.50% to your interest rate
- You may also need to pay a one-off fee or take out LMI (lender’s mortgage insurance)
Deposit Mistakes to Avoid
- Using all your savings for the deposit — leave money for legal fees, LIM reports, insurance, etc.
- Borrowing the deposit from family or personal loans — banks will factor this into your debt (unless they give it to you as a gift).
- Not checking if KiwiSaver can be used — it often can (see below)
Can I Use KiwiSaver for My Deposit?
Yes! If you’ve been contributing to KiwiSaver for at least 3 years, you may be able to:
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- Withdraw most of your KiwiSaver balance to use as a deposit
- Qualify for a First Home Grant (up to $10,000)
👉 Talk to your provider and a mortgage advisor before making any moves.
Example: Real Deposit Scenarios in 2025
| Buyer Type | Income | Deposit Saved | Property Type | Possible Outcome |
|---|---|---|---|---|
| First-home couple | $140k | $80k | Existing Property ($500k) | 20% = meets standard deposit |
| Solo buyer | $85k | $30k | New Build ($450k) | May qualify for 10% deposit |
| Low-income couple | $90k | $25k | New Build (First Home Loan) | May qualify for 5% deposit via Kainga Ora |
How to Strengthen Your Mortgage Application
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- Use our Mortgage Calculator to see what you can afford
- Talk to a mortgage broker early
- Avoid unnecessary short-term debt
- Cancel unused credit cards
- Boost your UMI (Uncommitted Monthly Income) if possible
🔗 [Read the full mortgage approval process] for more detailed guidance
Final Thoughts
Your deposit isn’t just about ticking a box — it sets the foundation for your borrowing power, interest rate, and financial security in your first home. The good news? There are more options than ever for first-home buyers in 2025, especially if you plan ahead.
If you’re unsure whether your current deposit is enough, let us help you figure it out.
👉 Need personalised advice? [Contact us] for a free mortgage chat.
How much deposit do I need to buy a house in NZ in 2025?
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First-home buyers typically need:
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10% deposit for new builds
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20% deposit for existing properties
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Property investors generally need:
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20% deposit for new builds
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30% deposit for existing properties
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Some exceptions apply through Kainga Ora loans and non-bank lenders.
Can I buy a house in NZ with less than 20% deposit?
Yes — in some cases:
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First-home buyers may qualify for a Kainga Ora First Home Loan with just a 5% deposit
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Investors have fewer low-deposit options, but some non-bank lenders may accept 20% for existing homes, depending on risk profile and equity position
Note: Low-deposit borrowers usually pay a Low Equity Premium (LEP).
Can I use KiwiSaver for an investment property deposit?
No — KiwiSaver funds can only be used for an owner-occupied home. Investors cannot use KiwiSaver for property purchases, even if it’s their first home. One way around this is to live in the house for 6 months and then move out again to turn it in to an investment property.
What is the required deposit for a rental property in NZ?
For most banks in 2025:
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30% deposit is required for an existing rental
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20% deposit for a new-build rental, depending on the lender
Loan-to-value ratio (LVR) restrictions for investors are stricter due to Reserve Bank rules.
What is a Low Equity Premium (LEP) and who pays it?
An LEP is a fee or interest rate increase charged by lenders when the deposit is below 20%:
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It applies to first-home buyers with smaller deposits
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Property investors usually avoid LEPs by providing higher deposits upfront
LEPs can increase interest rates by 0.25% to 1.50%, depending on the loan size and lender.
Can property investors use equity instead of a cash deposit?
Yes. Many investors use existing equity in another property as a deposit for a new purchase. This strategy, often called a leveraged deposit, is common and acceptable to most lenders — provided your DTI (Debt-to-Income) and UMI (Uncommitted Monthly Income) are within range.
Can I use a personal loan or credit card for my deposit?
Both home buyers and investors can technically use personal loans for deposits — but it’s not recommended:
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Lenders treat it as debt, reducing how much you can borrow
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It can negatively impact your DTI ratio and loan approval
How do I know if my deposit is enough for my goals?
Use a mortgage calculator to estimate your borrowing capacity. Or better yet, speak with a mortgage broker to:
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Assess your eligibility
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Explore investor lending options
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Learn how to improve your borrowing power
🔗 [Read the full mortgage approval process] to see how deposit, debt, and income all factor into your approval.
