For many Kiwis, the dream of homeownership often comes with a significant challenge: saving enough for the deposit on a house in NZ. If you’re a first home buyer, understanding how much you need to save can feel overwhelming, especially with changing regulations and market conditions. Questions like how much deposit to buy a house in NZ in 2025 are common, and rightfully so—it’s a crucial step in your home-buying journey.
Your deposit not only determines your borrowing power but also plays a key role in securing your deposit and mortgage. Lenders often look closely at your savings history, so it’s important to plan carefully. In this guide, we’ll break down the deposit requirements for 2025, explore ways to save effectively, and help you create a realistic plan tailored to your situation.
The Standard 20% Deposit: Fact vs Fiction
When it comes to buying your first home in New Zealand, the idea of a 20% deposit has long been considered the gold standard. For many first home buyers, saving a 20% deposit for a house is seen as the most reliable way to secure mortgage approval. However, while this traditional approach remains a popular choice, it’s important to understand that it’s not the only path to homeownership.
In 2025, the reality of saving a 20% deposit varies significantly across different regions in New Zealand. For instance, in high-demand areas like Auckland or Wellington, the average house deposit can feel daunting, often exceeding $200,000 for a median-priced home. On the other hand, in more affordable regions, such as Invercargill or Whanganui, the deposit for a home loan might be considerably lower, making homeownership more accessible for first-time buyers.
But is a 20% deposit always necessary? Not necessarily. Many lenders now offer options for those with smaller deposits, sometimes as low as 10% or even 5%, depending on your financial situation and the type of home loan you’re applying for. While a larger deposit can reduce your mortgage repayments and potentially eliminate the need for Lender’s Mortgage Insurance (LMI), it’s worth exploring all your options.
Let’s look at what a 20% deposit means in real terms across different regions in New Zealand in 2025:
| Region | Median House Price | 20% Deposit |
|---|---|---|
| Auckland | $1,050,000 | $210,000 |
| Wellington | $875,000 | $175,000 |
| Canterbury | $680,000 | $136,000 |
| Waikato | $720,000 | $144,000 |
| Bay of Plenty | $830,000 | $166,000 |
| Otago | $665,000 | $133,000 |
| National Average | $795,000 | $159,000 |
Note: These figures reflect median prices as of early 2025. Property markets can change rapidly, so check current data when planning your purchase.
Understanding how much deposit you need to buy a house in NZ also involves considering other factors, such as your income, credit history, and the type of property you’re looking to purchase. For example, first home buyers may qualify for government schemes like Kainga Ora’s First Home Loan or First Home Grant, which can significantly reduce the required deposit amount.
Ultimately, while the 20% deposit remains a benchmark, it’s essential to weigh the pros and cons of saving for a larger deposit versus entering the market sooner with a smaller one. By doing so, you can make an informed decision that aligns with your financial goals and homeownership dreams
Lower Deposit Options: What’s Realistically Available in NZ?
For many first home buyers in New Zealand, saving for a house deposit can feel like a daunting task. However, there are options available that allow you to enter the property market with a smaller deposit for a home loan. Let’s explore the realistic possibilities for how much deposit to buy a house in NZ and what you need to know about deposit and mortgage requirements.
10% Deposits: A Viable Starting Point
Most major banks in New Zealand are open to accepting a 10% deposit for first home buyers, provided you have a strong income and an excellent credit history. This option significantly reduces the savings needed compared to the traditional 20% house deposit, but it comes with a few trade-offs:
- Higher interest rates: Expect to pay around 0.3-0.5% more than standard rates.
- Low Equity Margin (LEM) fees: These are additional costs applied to loans with smaller deposits.
- Stricter lending criteria: Banks will scrutinize your financial situation more closely.
- Less negotiating power: With a smaller deposit, you may have fewer options when it comes to loan terms.
While a 10% deposit can make homeownership more accessible, it’s essential to weigh the long-term financial implications.
5% Deposits: Breaking Into the Market Sooner
If saving for a house deposit feels out of reach, there are pathways to homeownership with just a 5% deposit:
First Home Loan (Kāinga Ora): Backed by the government, this scheme allows first home buyers to purchase a property with a 5% deposit, provided the property falls within regional price caps. It’s an excellent option for those struggling to save a larger deposit for a home loan.
- Bank low deposit schemes: Some banks offer specialized programs for high-income earners who can demonstrate strong repayment potential, even with a smaller deposit for a house.
These options can be a game-changer for first home buyers, but they often come with stricter eligibility requirements and potentially higher costs.
Chart: Comparing deposit requirements and their impact on a $600,000 property purchase
Wondering if you qualify for a low deposit home loan? Book a free assessment call with our mortgage specialists to explore your options based on your unique financial situation.
Understanding LVR Restrictions in 2025
Loan-to-Value Ratio (LVR) restrictions limit how much banks can lend against a property’s value. As of 2025, the Reserve Bank maintains these restrictions to ensure financial stability, but allows banks to make a certain percentage of high-LVR loans.
Currently, banks can allocate up to 15% of their new lending to owner-occupiers with less than 20% deposit. This creates a competitive environment for these lower deposit loans, meaning you’ll need to present a strong application to be considered.
KiwiSaver First Home Withdrawal: Boosting Your Deposit
Your KiwiSaver can significantly boost your deposit if you’ve been contributing for at least three years. Most first home buyers can withdraw:
- Their contributions
- Their employer’s contributions
- Government contributions
- Investment returns
The only amount that must stay in your KiwiSaver is the $1,000 kick-start (if you received it when joining).
First Home Grant
On top of your KiwiSaver withdrawal, you may be eligible for the First Home Grant:
- $5,000 per person for existing homes ($10,000 for couples)
- $10,000 per person for new builds ($20,000 for couples)
Eligibility depends on:
- Income limits ($95,000 for individuals, $150,000 for couples)
- Property price caps that vary by region
- Minimum 3 years of KiwiSaver contributions
Not sure how much you could withdraw from your KiwiSaver for your first home? Our advisers can help you calculate your potential withdrawal amount and explain how to maximize government grants. Contact us for a personalized KiwiSaver assessment.
Family Support Options: The Bank of Mum and Dad
Family assistance remains a significant factor in first home purchases in 2025. There are several ways parents or family can help:
- Gifts: Direct financial contributions to your deposit
- Guarantees: Using equity in their property to support your application
- Family loans: Structured lending arrangements between family members
Banks have different policies on how they treat family assistance, so it’s important to understand these before including family support in your plans.
Deposit Requirements by Property Type
Your deposit requirements can vary significantly depending on the type of property you’re buying:
Standard Standalone Homes
- Traditional 20% deposit preferred
- 10% possible with strong application
- 5% possible through government schemes
Apartments
- Often require 20-30% deposit, especially for smaller units (<50m²)
- Banks consider body corporate financial health
- New builds typically have more favorable lending terms
Lifestyle Properties
- Usually require 25-35% deposit
- Lenders assess land value vs. building value
- May require additional income verification
Off-the-Plan Purchases
- Typically require 10% deposit to secure
- Final lending assessment done at completion
- May offer better low-deposit options
Different property types have different lending requirements. Schedule a no-obligation consultation to understand exactly what deposit you’ll need for the specific type of property you’re considering.
The True Cost of a Lower Deposit
While a lower deposit gets you into a home sooner, it comes with additional costs:
| Deposit % | Purchase Price | Deposit Amount | Additional Costs Over 5 Years |
|---|---|---|---|
| 20% | $700,000 | $140,000 | Standard rate |
| 10% | $700,000 | $70,000 | +$15,000 (higher interest + LEM) |
| 5% | $700,000 | $35,000 | +$25,000 (higher interest + LEM) |
Note: These figures are examples only. Your actual costs will depend on your specific loan terms.
Creating Your Deposit Savings Plan
Based on current market conditions, here’s a practical guide to saving your deposit:
- Determine your target property price range based on your income and the areas you’re interested in.
- Calculate your minimum deposit requirement (typically 5-20% depending on your situation).
- Add approximately 3-5% for purchase costs (legal fees, building inspections, etc.).
- Set up an automatic savings plan to a separate high-interest account.
- Track your KiwiSaver contributions and estimate your withdrawal amount.
- Research First Home Grant eligibility and add potential grant to your deposit calculation.
Want to understand the true long-term cost of different deposit options for your specific situation? Talk to our team for a detailed cost comparison customized to your financial circumstances.
The Bottom Line: How Much Do You Really Need?
In 2025, the realistic minimum you need as a first home buyer in New Zealand is:
- Absolute minimum: 5% deposit + 3% costs = 8% of purchase price
- Realistic minimum: 10% deposit + 3% costs = 13% of purchase price
- Preferred position: 20% deposit + 3% costs = 23% of purchase price
For a $700,000 property, this translates to having between $56,000 and $161,000 saved, depending on which path you take.
Ready to Take the Next Step?
Understanding deposit requirements is just one part of the home buying journey. Every buyer’s situation is unique, and there may be options available to you that aren’t covered in general advice.
Book a free, no-obligation strategy call with our team of mortgage specialists who can assess your specific situation and help create a customized plan to get you into your first home sooner.
Our advisers have helped thousands of first home buyers navigate the complex process of securing finance, even with deposits lower than the standard 20%. We’ll help you understand all your options and find the best path to homeownership for your circumstances.
Disclaimer: Information in this article is current as of March 2025 and is provided for general information purposes only. Deposit requirements and lending criteria can change frequently. Please consult with a financial adviser before making decisions based on this information.
Dev Dhingra
I've dedicated my career to helping Kiwis achieve their dream of homeownership. As the founder & CEO of Fundmaster, my mission is to transform the mortgage industry and make buying a home more accessible for everyone.