Less Than 20% Deposit

There have been some changes to the deposit requirements when purchasing a property in New Zealand. These changes have forced banks in New Zealand to only accept 10% of their total lending to customers with less than a 20% deposit.

There are however other opportunities to purchase property with less than  20% deposit.

Access Funds from Your KiwiSaver

Have you have been in KiwiSaver for more than 3 years and meet some basic criteria? Then you are more than likely able to access funds from your KiwiSaver provider. This is becoming a popular avenue in finding assistance with deposit funds.                                  

Although there are some exclusions, this assistance is generally only available to people purchasing their first family home.

First Home Buyers Subsidy – Housing New Zealand

This subsidy is closely linked to the length of time you have been in your KiwiSaver scheme and contributions made to your KiwiSaver. If you meet certain criteria you are able to receive $1,000.00 for every year you have been in KiwiSaver up to a maximum of $5,000.00. 

This subsidy is available for each application. For example, if there are two applicants then you could be eligible for up to $10,000.00 to help towards the required deposit. Although there are some exclusions, this assistance is generally only available to people purchasing their first family home.

The First Home Loans Product

This product has been placed on the market by Kāinga Ora – Homes. Communities and only requires a 5% deposit when purchasing a first home. There are certain restrictions to this product so please contact us by phone to discuss other options available. 

Gifted Deposits

If you don’t have less than 20% deposit saved you may be able to ask a family member for assistance. A gift (please contact us for the guidelines around a gift) can only be made by a family member. It is helpful when you have not saved the full deposit amount required.

The family member simply gifts you the difference between what you have saved and what the deposit amount is required to add up to 20%. For example, if you have $40,000.00 saved and need a deposit of $60,000.00, then a family member can gift you another $20,000.00 to complete the deposit amount required.

Using a family member’s existing equity – A guarantor

This is similar to a gift but revolves around a family member already owning a home or rental property. With enough equity (the difference between the value of the property and the existing mortgage) can help with the deposit required.

There is a drawback of using a family member’s property to to obtain enough deposit. Indeed you are forced to use the same lender as the person whose property you are using.

You are also placing the family member who guarantees the loan in a position where if you fail to repay your mortgage the lender can demand payment from the family member who gave the guarantee in the first place.

How much is a 20% deposit? 

What is the easiest way to find out if you have enough deposit? Simply work out the percentage of the purchase price of the house you want to buy. Grab a calculator and do the following:

  • Enter the purchase price of the house you wish to buy
  • Push the X (times) button
  • Enter 20
  • And push the % button

The answer that comes up is the deposit required by the lenders at 20%.


Are you preparing to purchase a home? We can help.

Please feel free to contact us if you have any questions relating to deposit funds, lending solutions, property valuation and more. Our team of brokers are here to offer you free, personal mortgage and home loan advice.

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