How much of a deposit do I need to buy a house in NZ?

What Deposit Do I need?

In New Zealand, the amount of deposit you'll need to buy a house can depend on various factors, including the type of mortgage you're applying for, your financial situation, and the policies of the lender. Here is a break down to help you understand.

Typical Deposit Amount

The most common requirement among lenders is a minimum deposit of 20% of the purchase price of the property. This means if you're buying a house valued at $500,000, you'd need a deposit of $100,000. However, some lenders may accept a smaller deposit, such as 10%, but this could come with conditions like higher interest rates or the need for mortgage insurance.

Why a Larger Deposit Helps

Having a larger deposit has its advantages:

• Better Mortgage Terms: Lenders might offer lower interest rates and fees.
• Less to Borrow: A larger deposit means borrowing less, which leads to lower monthly repayments and less interest over time.
• More Attractive to Lenders: A bigger deposit shows you're good at saving and managing money.

Help for First-Time Home Buyers

It's important to note that the New Zealand government offers schemes like the First Home Loan and KiwiSaver, which can help eligible first-home buyers with their deposit. These schemes provide financial assistance to qualified applicants, allowing them to buy a home with a lower deposit than they might otherwise need.

Talk to a Mortgage Advisor

Before you start house hunting, it's a good idea to speak with a mortgage advisor. They can assess your financial situation, discuss your options, and help you determine the deposit amount required for your specific circumstances.