Total Mortgages
Can I get a mortgage with 10% deposit?

Can I get a mortgage with 10% deposit?

Mortgages 101
Words by
Jordan Cameron

Purchasing a first home in New Zealand is a significant milestone, but it can also be a daunting process. One of the primary concerns for potential buyers is the deposit required to secure a mortgage.

Understanding the Deposit Requirement

While the ideal deposit is 20% of the purchase price, there are options available for those who may not have this amount saved. For those with less than a 20% deposit, you may qualify as a Low Equity Borrower. This means you could potentially secure a mortgage with a 10% or even a 5% deposit. However, this comes with additional fees and higher interest rates. It's crucial to seek independent advice from a mortgage adviser before making any decisions regarding your deposit and loan product.

Government Initiatives for First Home Buyers

The New Zealand government has several initiatives in place to assist first-home buyers. One of these is KiwiSaver, a scheme designed to help individuals save for their retirement. If you've been a member for at least three years, you may be eligible to withdraw some of your KiwiSaver savings to put towards a home deposit.

In addition to KiwiSaver, Kāinga Ora offers the First Home Grant and the First Home Loan. The First Home Grant can contribute up to $10,000 towards the deposit for eligible buyers. The First Home Loan allows eligible buyers to apply for a home loan with as little as a 5% deposit. Both of these initiatives have specific eligibility criteria, including income caps and limits on the purchase price of the property.

Factors Influencing the Deposit Amount

The amount of deposit needed to buy a first home in New Zealand varies depending on several factors. These include your financial ability, savings goal, and the current state of the housing market. By seeking independent financial advice and exploring all available options, including KiwiSaver and Kāinga Ora programmes, buying your first home can become an achievable goal.

Understanding House Deposits

A house deposit is a lump sum of money paid at the beginning of a mortgage. It's typically a percentage of the total purchase price of the property. In New Zealand, home buyers are generally required to provide a minimum deposit of 10% of the purchase price, although some lenders may require more. The deposit acts as a security for the lender, reducing the risk of the borrower defaulting on the loan.

Sources of Deposit

The deposit for your first home can come from various sources, including savings accounts, term deposits, KiwiSaver, First Home Grants, financial gifts from family, or the sale of assets. Regardless of the source, it's essential to have a clear and realistic savings plan in place. This plan should account for not just the price of the property but also additional expenses such as legal fees, valuation costs, and moving expenses.

The Kāinga Ora First Home Grant

The Kāinga Ora First Home Grant is a financial assistance programme for first home buyers. It offers up to $5,000 for an existing home or up to $10,000 for a new build property. To be eligible, there are certain criteria that you need to meet, including income and property price caps, not owning any other properties, and agreeing to live in the new house for at least six months.

RBNZ Regulations

The Reserve Bank of New Zealand (RBNZ) has regulations in the form of speed limits on mortgage lending with less than 20% deposit. These speed limits are designed to prevent the housing market from overheating and to safeguard the economy against a crisis caused by excessive mortgage lending. As of May 2021, the current speed limits are that no more than 15% of a bank's lending can be to borrowers with a deposit of less than 20%.

Turn-key Home and Land Packages

For those considering building their first home, a turn-key home and land package can simplify the process. These packages are exempt from the RBNZ's speed limits, meaning buyers can secure a mortgage with a deposit as low as 10% of the purchase price. A turn-key home and land package is a complete, move-in ready home on a plot of land, typically including everything from the design of the home to the construction, landscaping, and even the installation of appliances.

The Kāinga Ora First Home Loan

The Kāinga Ora First Home Loan is another option for first home buyers with a low deposit. This government-backed loan enables buyers to purchase their first home with a smaller deposit than they would otherwise need. To be eligible, buyers must meet certain criteria, including having a deposit of at least 5% of the purchase price, a combined household income below a certain level, and being a New Zealand citizen or permanent resident.


In conclusion, the deposit needed to buy a first home in New Zealand can come from various sources and can be less than the traditional 20% in certain circumstances. By exploring all available options, including KiwiSaver, Kāinga Ora programmes, and low deposit loans, and seeking advice from a trusted mortgage broker, you can make buying your first home an achievable goal.

Ready to Take the Next Step?

Navigating the property ladder can be challenging, but you don't have to do it alone. Our team of experienced mortgage brokers at Total Mortgages are here to guide you through every step of the process. From understanding deposit requirements to exploring government initiatives, we're committed to helping you make informed decisions.

Don't let the complexities of home buying hold you back from achieving your dream. Book a call with a Total Mortgages broker today and take the first step towards owning your first home. We're looking forward to helping you turn your homeownership dreams into reality.