Twenty percent is the default answer, not the only answer. Between lender programmes, new build exemptions, Kāinga Ora support and shared ownership, there is usually more room than a single bank will tell you about.
Twenty percent is the standard benchmark, but it is not a legal minimum. Most lenders will consider 10 percent for an existing home, and 5 percent is achievable in specific circumstances — through a Kāinga Ora First Home Loan if you are eligible, through particular lender programmes, or by buying a new build. New builds matter because they are exempt from the Reserve Bank’s LVR restrictions, so a lender can approve them at a higher loan-to-value ratio without it counting against the cap on its low-deposit lending. Borrowing above 80 percent normally attracts a low equity margin or fee, which falls away as your equity grows.
Low deposit lending is the part of the market that changes fastest, and it changes for reasons that have nothing to do with you.
The Reserve Bank sets a limit on what proportion of a bank’s new lending can go to low-deposit borrowers. That is a cap on the bank’s book, not on your application — but the practical effect is rationing. A lender that was actively writing 10 percent deposit loans in March can be effectively shut in April, simply because of where it sits against its own allocation. Nothing about your file changed. The queue did.
On top of that sit the Kāinga Ora products, which have their own eligibility criteria and income caps that are reviewed periodically, and lender-specific programmes that come and go. Keeping track of which door is currently open is most of the job.
Current Reserve Bank LVR and DTI settings are published on the Reserve Bank of New Zealand website, and Kāinga Ora eligibility on kaingaora.govt.nz.
A government-underwritten loan letting eligible first home buyers borrow with a smaller deposit through participating lenders. Income and property price caps apply and are reviewed periodically.
A shared ownership scheme where Kāinga Ora takes a share in a new build alongside you, which you buy back over time. Eligibility criteria and caps apply.
New builds sit outside the Reserve Bank’s LVR restrictions, so lenders can go to a higher loan-to-value ratio without it counting against their speed limit.
Individual banks periodically open specific low-deposit offers for first home buyers. They open and close with little notice.
Commercial shared ownership lets you buy a majority share now and the rest later. See our shared home ownership page.
A guarantee over a parent’s property, or a gifted deposit, remains the most common route to a low deposit purchase. Both need care and independent legal advice.
A pre-approval matters more when your deposit is small, for two reasons.
First, it tells you the truth about your number before you fall in love with a house. Low-deposit servicing is tighter, and the gap between what you assume you can borrow and what a lender will actually advance is usually wider than people expect.
Second, it makes you credible. A low-deposit buyer without pre-approval is the least attractive offer on the table. With one, you are competing on price rather than on doubt — and you can move at the speed the market expects.
Be aware that low-deposit pre-approvals are more often conditional, and can be subject to the lender’s available allocation at the time you find a property. That is worth understanding up front rather than discovering at the worst moment.
For an existing home, 10 percent is the realistic floor with most lenders, and 5 percent is possible in limited circumstances — through specific lender programmes, Kāinga Ora First Home Loan for eligible buyers, or with a new build. New builds are treated more generously because they sit outside the Reserve Bank’s LVR restrictions.
The Reserve Bank limits the proportion of a bank’s new lending that can go to borrowers with small deposits. It is a cap on the bank’s overall book, not a ban on your loan. The practical effect is that low-deposit approvals are rationed: a bank may be enthusiastic one month and effectively closed the next, purely because of where it sits against its own limit.
Where you borrow above 80 percent of the property value, most lenders charge extra — either a margin added to your interest rate, or a one-off fee added to the loan. It typically falls away once your equity passes 20 percent, though you usually have to ask for it to be removed rather than it happening automatically.
Yes, materially. New builds are exempt from the Reserve Bank’s LVR restrictions, so lenders can approve them with a smaller deposit without it counting against their speed limit. For a buyer with a 10 percent deposit, that difference is often the whole decision.
Most first home buyers can withdraw their KiwiSaver savings towards a first home, leaving a minimum balance behind. It is one of the most common sources of a low deposit. Eligibility rules are set by government and change from time to time, so confirm your position with your scheme provider or on the Kāinga Ora website.
Sometimes yes, sometimes no. Waiting avoids the low equity margin and widens your lender choice, but it also exposes you to price movement and more rent paid in the meantime. It is genuinely a numbers question and worth modelling both paths before deciding.
The full guide — KiwiSaver, grants, costs and the whole process end to end.
Buying a share now and the rest later, with family or a commercial partner.
See where your deposit sits as a percentage, and what it means for your options.
Tell us what you have saved and what you are looking at. We will tell you which doors are currently open, which are not, and what would change that.