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. Typically, a larger deposit can provide you with more favourable mortgage terms, such as lower interest rates and reduced fees.

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.

Having a larger deposit has its advantages. Not only does it improve your chances of securing a mortgage, but it also reduces the amount you need to borrow, resulting in lower monthly repayments and less interest paid over the life of the loan. Moreover, a substantial deposit might make you a more appealing borrower to lenders, as it demonstrates your ability to save and manage your finances responsibly.

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.

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.