Most people assume the answer is 20%. In New Zealand it often is not. Depending on your income, your KiwiSaver and the kind of home you are buying, there are different routes into a first home, and some of them start with a 5% deposit. Tell me your situation and I will tell you honestly which routes are open to you.
You don’t need a perfect deposit, a property picked out or a folder full of documents before speaking with me. We’ll begin with a relaxed conversation about:
From a 5% deposit through to the full 20%, here is what each route asks for and who it tends to suit.
The First Home Loan is underwritten by Kāinga Ora and offered through selected banks, which is what allows a deposit as small as 5%. To qualify you need to have earned $95,000 or less in the last 12 months as a single buyer, or $150,000 or less buying with someone else or with dependents. There is no limit on what the property can cost. An insurance premium of 1.2% of the loan applies, and you can pay it upfront or spread it across the life of the loan.
A shared ownership provider buys a share of the home alongside you, which means around 5% is enough to get started. You are the majority owner from day one and you live in it as your own. You pay a charge on the provider’s share while they hold it, and you buy that share back over time as you pay down your loan. This route exists precisely for people who earn too much for the government scheme but still cannot put 20% together.
Some lenders will go above 80% of a property value on their own terms, with no government scheme involved and no income cap. This is known as low equity lending. You usually pay a low equity margin on top of your interest rate until you reach 20% equity, and it comes off once you get there. Banks are limited in how much of this lending they can write, so it pays to know which ones have room at the time you apply.
With a 20% deposit every main New Zealand lender will look at you, and you pay the normal interest rate with no extra charge for a small deposit. What catches people out is that the lender has to be happy with the house too. Some will not lend on certain apartments, leasehold land or unusually built homes, so a lender that is keen on you can still say no to the property. I match you to one that says yes to both.
Your deposit is only half the picture. In New Zealand, most owner occupiers can borrow up to about six times their gross household income, less any existing debts. On a household income of $120,000 that works out at roughly $720,000 of lending, with your deposit sitting on top of it.
Lenders work from your gross household income before tax, then subtract what you already owe. Two people earning $60,000 each are assessed on $120,000 together, not separately.
This one catches almost everyone. A lender counts the limit on your card, not what you actually owe on it. A $10,000 card you never touch still reduces what you can borrow. Closing cards you do not use is the quickest way to lift your number.
Lending under the First Home Loan sits outside that six times limit. For buyers on a modest income that can be the difference between a no and a yes, which is why it is worth checking before you assume the answer.
These are guides rather than promises. Every lender runs its own test, and they do not all reach the same answer on the same person. Working out your real number takes one conversation.
From the first conversation to the day you pick up the keys. Most first home buyers take a few months over this, and you can pause at any point without losing your place.
A relaxed conversation about what you want to buy, what you earn and what you have put aside. There is nothing to prepare and nothing to sign.
What you could borrow, which deposit routes you fit, and what each lender will want to see from you. This is the point where guessing stops.
I put the application together and take it to the lender most likely to say yes, so you can start looking with a price range you can trust.
You make an offer knowing what you can spend. I check the finance conditions with you before anything is signed.
The lender approves the property and signs off the conditions. I handle the questions and the paperwork going back and forth.
Your solicitor settles, the loan draws down and the house is yours. I explain how your loan is structured before you sign anything.
You do not have to be at step one to get in touch. Plenty of people come to me halfway through, or after a bank has already said no.
Every lender treats low deposits differently, and those rules change. I put your application where it has the best chance rather than wherever is quickest.
Paperwork, lender questions, conditions coming back. I handle the back and forth so you can get on with your life.
The lender pays me once your loan settles. That is the same whether you are buying with 5% or with 20%.
For most first home buyers the deposit is their KiwiSaver. If you have been contributing for at least three years and you meet the other conditions, you may be able to withdraw most of your balance towards your first home. A minimum of $1,000 has to stay in the account. That money can go towards any of the options above, whether you are buying with 5%, 10% or 20%.
Your KiwiSaver provider confirms what is available to you and how long it takes to release, so it is worth asking them early. I give mortgage advice rather than KiwiSaver investment advice. If you have questions about the fund itself, I can introduce you to someone at Isbister Partners who is qualified to answer them.
Conditional pre-approval gives you a clearer idea of your price range and lets you make an offer with more confidence. It often turns up something worth fixing before you start looking seriously, which is far easier to deal with early than in the middle of a deal.
Pre-approval is not a guarantee of final finance. The lender still needs to approve the property itself and confirm that every condition has been met. Most lenders take a few working days to a couple of weeks once your documents are in.
Lowest advertised special rate per term across NZ's main banks
Rates last updated: 24 October. Advertised special rates, minimum 20% equity, terms & conditions apply.
I work with first home buyers in Tauranga, Mount Maunganui, Pāpāmoa and across the Bay of Plenty, and with plenty of people who live nowhere near me. Most of this happens by phone, email and video call, so where you are does not change the advice or how easy it is to reach me. If you are local and would rather sit down together, that is easy to arrange.
The things people ask me most before they buy their first home.
Most lenders look for 20% of the purchase price, but it is often possible to buy with less. Through the First Home Loan, underwritten by Kāinga Ora, eligible first home buyers can purchase with a 5% deposit. Some lenders will consider 10% under their own low equity policies, and shared ownership can also work with 5%. Which one fits depends on your income, your credit history and what you are buying.
Yes, in some cases. The main route is the First Home Loan, which is government backed and offered through selected banks. To qualify you need to have earned $95,000 or less in the last 12 months as a single buyer, or $150,000 or less buying with someone else or with dependents. Shared ownership is a second route, and it often suits people whose income is above those caps.
No. The First Home Grant closed on 30 May 2024 and has not been replaced. The two forms of government support that remain for first home buyers are the First Home Loan, which allows a 5% deposit, and the KiwiSaver first home withdrawal.
Usually yes. If you have been contributing to KiwiSaver for at least three years and you meet the other conditions, you can generally withdraw most of your balance towards a first home. A minimum of $1,000 must stay in the account. Your provider confirms the exact amount and how long it takes to release.
It is an extra amount added to your interest rate when you borrow more than 80% of a property’s value, because a smaller deposit carries more risk for the lender. It usually comes off once you reach 20% equity, either by paying down the loan or through the property increasing in value. The First Home Loan does not carry one.
It depends mostly on your household income and what you already owe. Most owner occupiers land somewhere near six times their gross household income, but every lender runs its own affordability test and they do not all reach the same answer about the same person. Dependants, existing loans and credit card limits you never use will all pull the number down. Lending under the First Home Loan is assessed differently again, so it is worth checking rather than assuming.
Nothing. My service is free to you, because the lender pays me once your loan settles. If that ever would not be the case, I would tell you before we started, not after.
Your bank can only offer you its own products. It cannot tell you whether a First Home Loan or shared ownership through another provider would suit you better, because those are not products it sells. I compare home loans across most of New Zealand’s lenders and look at the options a single bank would never mention.
A no from one lender does not mean no everywhere. Lenders assess income, credit history and deposits differently, and a decline often comes down to one thing that can be explained or tidied up. It is worth a conversation before you assume the answer is no.
As a general rule you will need a residence class visa, or to be a New Zealand or Australian citizen. The rules are different for new builds and for some visa categories, so it is worth checking your own situation rather than relying on what applied to someone else.
It depends on your visa and on the lender. Some first home buyers can purchase as soon as they hold the right visa, while others need to show a period of New Zealand income first. Lenders differ on this more than people expect, which is exactly the kind of thing worth checking before you start looking.
