Most New Zealand lenders commonly look for a first home deposit of around 20% of the property’s value. However, 20% is not an absolute minimum for every buyer. Some lenders may approve eligible owner-occupiers with a smaller deposit, and qualifying first home buyers may be able to use a Kāinga Ora First Home Loan with a minimum 5% deposit.

The amount you actually need depends on the property price, the loan pathway, your income, existing debts, credit history and the lender’s assessment. You also need money outside the deposit for legal work, due diligence, moving, insurance and the first costs of ownership.

This guide shows how to calculate 5%, 10% and 20% deposits, explains the difference between a bank deposit and a sales deposit, and helps you choose a realistic savings target.

Quick answer

Fora $650,000 home:

• a 5% deposit is $32,500;

• a 10% deposit is $65,000; and

• a 20% deposit is $130,000.

The remaining loan would be approximately $617,500, $585,000 or $520,000 respectively, before any fees added to the mortgage. A larger deposit normally means a smaller loan and more starting equity, but waiting to reach 20% is not the only possible route.

First home deposit examples by purchase price

Use this formula:

Purchase price × deposit percentage = required deposit

These figures are mathematical examples, not loan offers. The lender may use the lower of the purchase price or its accepted valuation when calculating the loan-to-value ratio. If the valuation comes in below the contract price, the buyer may need to provide additional cash.

Why 20 percent is the standard deposit target

A 20% deposit gives the buyer an 80% loan-to-value ratio, commonly written as 80% LVR. For example, a $600,000 purchase with a $120,000 deposit leaves a $480,000 loan.

Settled states that most lenders ask first home buyers for a 20% bank deposit. From the lender’s perspective, a larger deposit provides a greater buffer if the property’s value falls or the borrower cannot maintain repayments.

• From the buyer’s perspective, reaching 20% can provide several advantages:

• a smaller mortgage and lower repayments than a 5% or 10% deposit on the same home;

• less interest paid over the loan term, all else being equal;

• greater starting equity;

• a broader choice of lenders or loan products; and

• a lower risk of additional low-equity fees or pricing.

The disadvantage is time. Saving 20% can take years while property prices, rent and personal circumstances continue to change. Buyers should compare the benefit of waiting with the cost and risk of buying earlier using a smaller deposit.

Can you buy with a 10 percent deposit

Potentially. Some banks provide a limited amount of lending to owner-occupiers with deposits below 20%, subject to their policies and the Reserve Bank’s LVR restrictions.

Under the current Reserve Bank settings, no more than 25% of a bank’s new owner-occupier lending can have an LVR above 80%. This is a limit on each bank’s overall lending rather than an entitlement for individual borrowers. A bank may have limited capacity for low-deposit applications and may impose stricter affordability, property or pricing requirements.

A 10% deposit can be a useful middle ground. It halves the cash required compared with 20%, while providing twice as much starting equity as a 5% deposit. However, approval still depends on the lender and the property.

Can you buy with a 5 percent deposit

Yes, some eligible first home buyers can use a Kāinga Ora First Home Loan with a minimum 5% deposit. The loan is issued by participating lenders and underwritten by Kāinga Ora.

The scheme currently requires applicants to satisfy age, residency, buyer-status, income, deposit and owner-occupation conditions. The lender makes the final decision and applies its own affordability and credit rules. A 1.2% lender’s mortgage insurance premium may also need to be reimbursed by the
borrower, along with any lender fees.

A separate article should provide the full eligibility and application detail. On this page, the important point is that 5% is a possible minimum for eligible buyers, not the standard deposit that every applicant can use.

Comparing 5 percent 10 percent and 20 percent deposits

The best deposit is not automatically the largest amount you can assemble. Retain enough cash for purchase costs and emergencies. Putting every dollar into the property can create financial stress immediately after settlement.

The bank deposit and sales deposit are not the same

This distinction causes confusion for many first home buyers.

Bank or finance deposit

The bank deposit is your total contribution toward the property purchase. If you buy a $650,000 home with a 10% bank deposit, your total contribution is $65,000 and the proposed loan is $585,000.

Sales deposit

The sales deposit is written into the sale and purchase agreement and is normally paid when the agreement becomes unconditional. Settled says it is usually around 10% of the agreed purchase price, although the amount can be negotiated.

The sales deposit forms part of your total purchase funds; it is not an extra percentage added on top.
However, its timing matters. KiwiSaver money and other funds may not be immediately available when the sales deposit is due.

Before signing, ask your lawyer to confirm:

• how much sales deposit is required;

• when it becomes payable;

• whether KiwiSaver can be used at that stage;

• whether a lower amount should be negotiated; and

• what happens to the deposit if contractual conditions are not satisfied.

Can KiwiSaver form part of your first home deposit

Yes, if you meet the first-home withdrawal rules. Inland Revenue states that you must have been a KiwiSaver member for at least three years. An eligible buyer may withdraw their contributions, employer contributions, government contributions, interest and qualifying fee subsidies, while leaving at least $1,000 in the account.

Request an estimate or eligibility confirmation from your provider before setting a property budget. The balance visible in an app may not equal the amount available for withdrawal, especially if it includes funds
transferred from an Australian complying superannuation scheme.

For two eligible buyers, both may be able to apply for withdrawals. Each provider will require documentation and enough processing time, so do not wait until settlement is close.

Other ways buyers may assemble a deposit

• The source of deposit must be acceptable to the lender and supported by evidence. Possible sources can include:

• personal cash savings;

• eligible KiwiSaver withdrawals;

• investments that can be sold and verified;

• a genuine family gift;

• proceeds from another accepted asset; or

• shared funds from co-buyers.

A family loan is different from a gift because repayment creates an additional financial obligation. A family guarantee or use of another property as security also creates serious risk for the person providing support. Every party should obtain independent legal advice.

Avoid borrowing the deposit through unsecured credit unless the lender has expressly approved the arrangement. New debt can reduce borrowing capacity and create unsustainable repayments.

How much extra cash should you keep beyond the deposit

There is no single figure suitable for every purchase, but the deposit should not be your entire buying budget. Create a separate allowance for the following costs.

Legal advice and conveyancing

A property lawyer reviews the sale agreement, title, conditions and settlement documentation. Off-plan and unit-title purchases may require more detailed legal work.

Valuation and lending costs

A lender may require a registered valuation. Low-deposit lending can also involve application charges, lender’s mortgage insurance or low-equity pricing.

Property due diligence

Depending on the home, buyers may obtain a LIM, building inspection, title review and specialist reports. A new build should still be inspected and its completion documents reviewed.

Insurance and rates

The lender normally needs evidence that appropriate insurance is available before settlement. Council rates adjustments can form part of the settlement statement.

Moving and setup

Budget for movers, connections, furnishings, window coverings and immediate household needs.

Emergency reserve

Keep a buffer for unexpected repairs, income changes and higher living costs. The right amount depends on household commitments, but zero emergency savings is a warning sign even if the lender is willing to approve the loan.

How property price changes the deposit target

Choosing a home that is $50,000 less expensive reduces a 20% deposit target by $10,000, a 10% target by $5,000 and a 5% target by $2,500. The purchase price also changes the mortgage by the remaining amount, so the benefit continues through repayments and interest.

This is why first home buyers should search by total affordability rather than focusing only on deposit percentage. A smaller, well-located home may produce a more resilient budget than stretching to the top of a pre-approved range.

Homes by Pillar’s Auckland development portfolio currently allows buyers to filter available homes by suburb, bedrooms and advertised price. The portfolio currently starts from $550,000, subject to availability and confirmation.

At the listed starting price of $550,000, the mathematical deposit targets would be:

• $27,500 at 5%;

• $55,000 at 10%; and

• $110,000 at 20%.

The 16–18 Lincoln Road homes in Manurewa East are the current listing at that starting price. These figures do not confirm that a particular buyer or property qualifies for lending.

Deposit examples from current Auckland new builds

The following examples use advertised starting prices shown on Homes by Pillar’s live development page on 11 October 2026.

You can review the current property information for 9 Glenside Avenue in Pakuranga, 2 Fairlands Avenue in Waterview and 8 Ashcroft Avenue in Māngere Bridge. Prices and availability can change, so recheck every figure when planning finance.

How lenders decide whether your deposit is enough

• The percentage is only the starting point. The lender also considers:

• verified income and employment stability;

• household expenses and dependants;

• existing loans and revolving credit limits;

• credit history and account conduct;

• the proposed mortgage repayment at the lender’s assessment rate;

• the property type, title and valuation;

• the source and evidence of the deposit; and

• whether any scheme or lender-specific rules are met.

Two households with the same deposit can receive different outcomes because their income, debts, expenses and chosen properties differ.

How to set your personal deposit target

Follow this practical process rather than choosing a percentage in isolation.

Step 1 Calculate your available funds

Add cash savings, verified KiwiSaver withdrawal estimates, accepted gifts and investments you genuinely intend to use.

Step 2 Subtract purchasing costs and your emergency reserve

Do not count money that must pay legal, valuation, inspection, moving or immediate ownership expenses.

Step 3 Ask a lender to assess borrowing capacity

Your deposit may suggest one price range while your income supports another. Use the lower, safer figure.

Step 4 Compare deposit pathways

Ask about standard lending, the First Home Loan and any lender-specific new-build options. Request the interest rate, fees and repayment implications for each.

Step 5 Stress-test the budget

Calculate repayments at a higher interest rate and consider how parental leave, childcare, vehicle replacement or income interruption would affect the household.

Step 6 Choose a home below the maximum if necessary

The lender’s maximum is a ceiling, not a spending target. Leaving room in the budget improves resilience.

Should you wait until you have a 20 percent deposit

Waiting may be worthwhile if it will take a manageable amount of time, substantially reduce the mortgage, improve lender options or allow you to retain an emergency fund. It may also be prudent if income is uncertain or consumer debt remains high.

Buying earlier with a smaller deposit may be reasonable if you qualify for an appropriate pathway, have stable income, can absorb the larger repayments and expect to keep the home for the medium to long term.

Compare both options using realistic figures. Include rent paid while saving, likely savings growth, possible property-price changes, loan costs and the risk of buying with limited equity. No one can guarantee which option will produce the better financial outcome.

Common deposit mistakes first home buyers should avoid

• Treating pre-approval as guaranteed final finance.

• Confusing the sales deposit with the total bank deposit.

• Using all available cash and keeping no emergency reserve.

• Forgetting legal, valuation, inspection and moving costs.

• Assuming a KiwiSaver balance is fully withdrawable without provider confirmation.

• Taking new vehicle finance or increasing card limits before settlement.

• Basing calculations on an advertised “from” price without confirming the actual home.

• Signing an unconditional agreement before the lawyer and lender are ready.

• Focusing on deposit percentage while ignoring repayment affordability.

Final answer

Most first home buyers in New Zealand should treat 20% as the standard deposit benchmark, but some can purchase with 10% or as little as 5% through an approved low-deposit pathway. The correct target depends on the home price, your eligibility, the lender’s assessment and the cash you need outside the
deposit.

Start by calculating all three scenarios. Then obtain a verified KiwiSaver estimate, set aside purchasing costs and ask a lender for conditional pre-approval. Once your genuine range is clear, compare current Homes by Pillar developments by location, size and advertised price.

This article provides general information only and is not financial, legal or tax advice. Lending criteria, fees, government programmes, property prices and availability can change. Obtain personalised advice before entering a property agreement.