Real Estate Investment

How much deposit to buy a house in NZ?

Buying your dream home in New Zealand is simple. You select the house you want to buy, then put down a deposit as the down payment. Your lender covers the rest of the difference. That sounds easy, but you might ask how much deposit do you need to buy a house in NZ?

Before looking at properties, you need to save for a deposit. How much deposit you need, depends on whether you are buying the property as an investment property or you will be living in the property.

Generally, the mainstream banks’ requirement for a deposit to buy a home in New Zealand is either 20% for a pre-approval or 10% on an existing offer in place. And if you are an existing client at the bank, some banks will allow a 10% deposit for a pre-approval. The non-bank lenders, may only require a 10%-15% deposit.

Of course, many people do not have the 20% deposit they need for their dream home, and they come to Platinum Mortgages to seek advice on how they can achieve that goal. As the first step, Platinum Mortgages Advisers will need to understand how much deposit you have at hand, what purchase price you can get with your deposit and what is the purchase price of your desired house.

By looking at the gap between your deposit and house purchase price, we can provide the best mortgage option for you or help you work towards your savings goal. Even if you don’t have enough deposit for your dream home, we can look at alternative options or ways to help you achieve your goal.

If this is your first home, or you have previously owned a house, you have been contributing regularly to KiwiSaver, and you intend to live in the property, then you may only need a 5% deposit.

What the lenders need to know

Most lenders want a guarantee that you will be able to pay off your loan once the contract is signed and the house is yours. They do this by:

  • Looking at your income: your financial transactions, savings, credit lines, and how responsible you have been with previous rent or mortgage payments. 
  • How much deposit you currently have: your savings, gifting from parents or relatives, KiwiSaver, and First Home Grants.

Contact Platinum Mortgages to get a better understanding of what information you need to provide for your mortgage application. The team are here to steer you in the right direction, and they will be honest with feedback or suggestions.

Make sure you can afford your repayments

Especially for a first-time buyer, the most important thing to consider is whether you can afford your mortgage repayments (i.e. the amount you need to repay after deducting your deposit from the property purchase amount). As every lender will have different interest rates, use our Mortgage Repayment Calculator  to work out your monthly, fortnightly, or weekly mortgage repayments.

At Platinum Mortgages, the Financial Advisers will also work together with you to put a budget plan in place before you start looking for a property, so you can prove to the lender that you have sufficient income to repay your mortgage after deducting the expenses.

Taking the Final Decision

Talk to Platinum Mortgages and obtain expert advice before making any final decisions. They will provide you with the best advice for your particular situation. Considerations should include the deposit amount, mortgage term, interest rates, loan structures, affordability and sustainability, planning for a rainy day and exit plans etc.