Saving a deposit to buy a home can be a huge ask for aspiring home owners. But what size deposit do you need to save? Canstar explores how much you need to save to buy a house in New Zealand.
How much deposit do you need to buy a house?
Although you can buy a home with a deposit of as low as 5%, it’s preferable to save at least a 20% deposit for a home for three reasons:
- Your mortgage application won’t be restricted by the loan-to-value ratio (LVR) restrictions
- Lenders reserve their lowest mortgage rates for home buyers with at least a 20% deposit
- You’ll not have to pay extra costs, such as a low equity premium (LEP) or lender’s mortgage insurance
How much deposit: what are the LVR restrictions?
An LVR refers to the size of a loan compared to the value of the property it’s used to purchase. For example, if you buy a home worth $1 million with a $300,000 deposit and a $700,000 mortgage, this means 30% is coming from you, and 70% from the bank, which is an LVR of 70%.
Because low deposit mortgages come with greater risks for banks, the RBNZ sets limits on banks’ low deposit lending. At the end of last year, the RBNZ increased the amount of low deposit lending banks are able to make:
- 25% of owner-occupier lending to borrowers with an LVR greater than 80% (up from 20%)
- 10% of investor lending to borrowers with an LVR greater than 70% (up from 5%)
Banks are still able to accept low-deposit applications
Even with the LVR restrictions in place, banks are still able to process low-deposit home loans. They are just limited to 25% of their new lending.
If you’ve a good income and a secure job, and can prove to a lender that you’ve a solid financial head on your shoulders, you could still find a lender willing to grant you a mortgage.
And it’s not like every first home buyer (FHB) is competing for a low-deposit loan. The latest RBNZ mortgage figures show that more than half of of FHBs (55%) had a deposit of at least 20% over the past year.
NB: It’s also worth noting that only registered banks in NZ have to adhere to the LVR rules. Non-bank lenders can set their own limits, although many non-bank lenders charge higher interest rates than the big banks.
How much deposit: low deposit = higher mortgage rates and fees
However, because low-deposit borrowers are at a greater risk of defaulting on their loans, if you’ve a low deposit, you’ll end up paying more for your mortgage.
For those with less than a 20% deposit, four of the banks listed below charge LEPs as annual extra interest charges, which, as you can see, can add up to an extra 1.75% p.a. Other lenders simple offer higher standard rates to low-deposit lenders.
ANZ
ANZ doesn’t charge a low equity premium, instead it charges higher standard interest rates (about 60bps) for those with less than a 20% deposit.
ASB
ASB’s low equity premiums:
- 80.01% – 85% LVR: 0.30% of loan amount p.a.
- 85.01% – 90% LVR: 0.75% p.a.
- 90.01% – 95% LVR: 1.30% p.a.
- Over 95% LVR: 1.50% p.a.
BNZ
BNZ’s low equity premiums:
- 80.01% – 85% LVR: 0.35% of loan amount p.a.
- 85.01% – 90% LVR: 0.75% p.a.
- 90.01% – 95% LVR: 1.20% p.a.
- Over 95% LVR: 1.50% p.a.
Kiwibank
Kiwibank doesn’t charge a low equity premium, instead it charges higher standard interest rates (about 70-90bps) for those with less than a 20% deposit.
SBS Bank
SBS doesn’t charge a low equity premium, instead it charges higher standard interest rates (about 60bps) for those with less than a 20% deposit.
The Co-operative Bank
The Co-operative Bank charges a low equity premium of between 0.20-1.00% p.a. on top of its standard rates for borrowers with less than a 20% deposit.
TSB
TSB doesn’t charge a low equity premium, instead it charges higher standard interest rates (about 80bps) for those with less than a 20% deposit.
Westpac
Westpac’s low equity premiums:
- 80.01% – 85% LVR: 0.25% of loan amount p.a.
- 85.01% – 90% LVR: 0.75% p.a.
- 90.01% – 95% LVR: 1.50% p.a.
- Over 95% LVR: 1.75% p.a.
(Rates correct at 24/06/2026)
LEPs not all bad news
Although paying a higher mortgage rate is never preferable, if it allows you to get into a first home, it can be worth the short-term pain. For due to the way that ongoing LEPs are calculated, as you pay off your loan and, hopefully your property rises in value, your LEP should diminish as the equity in your home rises.
However, to ensure that you’re not out of pocket, you’ll need to keep a close eye on house prices in your area and the size of your debt. A bank won’t actively revise the LEP that you’re paying unless you contact them and ask for a re-evaluation of the price of your home and your equity in it.
First home buyer loan rates
If you’re currently considering a home loan, the table below displays some of the 2-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
How much deposit: average prices vs deposits
Of course, the size of the deposit you need to buy a home depends on the property and its location. Region to region and street to street houses vary in size, quality and price.
However, based on May 2026’s median house prices from REINZ, as a rough guide, here’s what 10% and 20% deposits for median priced homes around the country look like.
| Region | Median house price | 10% Deposit | 20% Deposit |
| Auckland | $1,005,000 | $100,500 | $201,000 |
| Bay of Plenty | $800,000 | $80,000 | $160,000 |
| Tasman | $792,000 | $79,200 | $158,400 |
| National Median Price | $775,000 | $77,500 | $155,000 |
| Wellington | $770,000 | $77,000 | $154,000 |
| Waikato | $750,000 | $75,000 | $150,000 |
| Canterbury | $725,000 | $72,500 | $145,000 |
| Nelson | $689,000 | $68,900 | $137,800 |
| Otago | $685,000 | $68,500 | $137,000 |
| Hawke’s Bay | $675,000 | $67,500 | $135,000 |
| Northland | $660,000 | $66,000 | $132,000 |
| Marlborough | $645,000 | $64,500 | $129,000 |
| Taranaki | $602,000 | $60,200 | $120,400 |
| Gisborne | $566,000 | $56,600 | $113,200 |
| Southland | $540,000 | $54,000 | $108,000 |
| Manawatu-Whanganui | $525,000 | $52,500 | $105,000 |
| West Coast | $375,000 | $37,500 | $75,000 |
Source: REINZ
About the author of this page
This report was written by Canstar’s Editor, Bruce Pitchers. Bruce has three decades’ experience as a journalist and has worked for major media companies in the UK and Australasia, including ACP, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ. Prior to Canstar, he worked as a freelancer, including for The Australian Financial Review, the NZ Financial Markets Authority, and for real estate companies on both sides of the Tasman.
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