How much deposit do I actually need to buy my first home?
It’s a great question, and one we hear a lot from first home buyers.
The short answer? It depends on your situation… but here’s a quick rundown to help make sense of it.
If you qualify for a First Home Loan (via Kāinga Ora), you might only need a 5% deposit, which can make a huge difference when you're trying to get a foot on the ladder.
To be eligible, your income needs to be under $95k (individual) or $150k (couple), and you must be a first home buyer (or in a similar financial position). You can use this loan for a new build or existing home, but the new build generally needs to be finished or within 90 days of completion.
For traditional builds (with progress payments), most banks still require a 10% deposit, even under First Home Loan criteria.
Also worth noting - the recent government budget increased the Lenders Mortgage Insurance (LMI) cost from 0.5% to 1.2% of the loan amount (from 1 July), which can bump up repayments a bit. The good news is that First Home Loans often come with favourable interest rates, which still makes them an attractive option.
What if you don’t qualify for a First Home Loan?
Outside the Kāinga Ora scheme, only a small number of banks will lend at 95%, and these options are usually reserved for existing customers and come with much higher interest rates.
The good news? Most banks are happy to lend to first home buyers with a 10% deposit, whether you're buying a new build or existing property.
New builds tend to be easier to fund, thanks to LVR and DTI exemptions, and some lenders offer better rates to reflect that.
Existing homes can be trickier, as banks must stay within their high-LVR lending limits. You're more likely to get approved for a live deal (where you've signed a contract with conditions like finance or due diligence), compared to a pre-approval, which can be harder to obtain. In this case, it's best to talk to your mortgage adviser about the best way to approach it
Not quite at 10%? Here are a few ways to bridge the gap:
Gift or deed of debt from parents – where banks will usually require a signed letter
Parental guarantee – parents use their home as security. Must be with the same bank, and helps bring your LVR down to 80%, where the best rates and cashback offers kick in
Co-borrowing with family – similar to a guarantee, but with shared responsibility and visibility
Fun fact
The Bank of Mum and Dad is now NZ’s 5th largest lender. No surprise when you see how many first home buyers get help from family.
One last thing
If you're applying through Kāinga Ora, most banks don’t require genuine savings. But if you're not, and your deposit is under 20%, lenders will typically want to see evidence that at least 5% has been genuinely saved over time (not gifted or borrowed).
Feeling a bit overwhelmed or unsure where to start?
Let’s chat. Everyone’s situation is different, but we’re here to make the process easier and help you take that first step toward owning your own home.