Buy your home with as little as 5% deposit. Explore low deposit options, low equity premiums, and government assistance schemes.
Check Low Deposit EligibilityWhile the standard deposit requirement is 20%, several options exist for borrowers who can't save that much. Here's what's available in 2026.
Government-backed scheme allowing eligible first home buyers → to purchase with just 5% deposit. Strict eligibility criteria apply.
Available from most major banks → for borrowers with strong income and credit. Low equity premium of 0.50-1.00% applies.
Family member guarantees part of your loan using their property as security, allowing you to borrow with minimal deposit.
More readily available than 10% deposit loans with lower low equity premium (typically 0.25-0.50%).
When you borrow with less than 20% deposit, most banks charge a Low Equity Premium (also called Low Equity Margin or LEP). This is an additional interest rate charge to compensate for higher risk.
15-20% Deposit (LVR 80-85%)
Minimal additional risk
10-15% Deposit (LVR 85-90%)
Moderate additional risk
5-10% Deposit (LVR 90-95%)
Higher risk lending
Example: $500,000 loan with 10% deposit (LVR 90%)
Once you've paid down your mortgage or your property increases in value enough to reach 20% equity, you can ask your bank to remove the low equity premium. This typically happens within 2-5 years for most borrowers.
The Welcome Home Loan (formerly First Home Loan) is a government-backed scheme allowing eligible buyers to purchase with just 5% deposit. No low equity premium applies.
Based on gross household income before tax
Price caps vary by region
A guarantor loan allows you to borrow with a small deposit (or sometimes no deposit) by having a family member guarantee part of your loan using their property or savings as security.
You provide a small deposit (5-10%)
Example: $50,000 on a $700,000 home
Your guarantor guarantees the shortfall
Example: Parent guarantees $90,000 using their property equity
You borrow the remaining amount
Example: $650,000 mortgage at standard rates (no low equity premium)
You make all repayments as normal
Guarantor has no payment obligations unless you default
Guarantee is removed once you reach 20% equity
Usually within 2-5 years through payments and property value growth
Important: Guarantor loans require careful consideration by all parties. The guarantor should understand they're potentially liable for the guaranteed amount if the borrower defaults. Independent legal and financial advice is strongly recommended.
Most major banks offer low deposit loans to qualified borrowers who have at least 10% deposit. These loans are more accessible than 5% deposit options but come with low equity premiums.
Stable employment with income sufficient to service the mortgage comfortably. Banks typically want mortgage payments under 30% of gross income.
No defaults, bankruptcies, or adverse credit events. Missed payments in the last 6-12 months will likely disqualify you.
Banks prefer to see at least half your deposit from genuine savings (not gifts), demonstrating saving discipline.
Minimal other debts. High credit card limits or personal loans can reduce your borrowing capacity.
Example: $630,000 loan on $700,000 home (10% deposit)
When can you remove the LEP? Once your LVR drops to 80% (through payments and/or property value increase). If your home increases in value by 5% per year, this could happen in just 2-3 years.
Increase contributions to at least 4% to maximize employer matching. KiwiSaver funds can be withdrawn for your first home deposit.
Set up automatic transfers to a savings account on payday. Treating savings like a bill ensures consistency.
Review subscriptions, dining out, and entertainment costs. Redirect this money to your deposit savings.
Consider a side hustle, overtime, or asking for a raise. Extra income accelerates deposit savings significantly.
Tax refunds, bonuses, birthday money - put it all toward your deposit instead of spending it.
Living with roommates while saving can cut rent costs in half, dramatically speeding up your savings timeline.
It's extremely rare in NZ. The only realistic no-deposit option is a family guarantor loan where parents guarantee 100% of the shortfall. Even then, you'll need to prove you can service the mortgage and cover purchase costs (legal fees, etc.).
It depends on your circumstances. Benefits of buying now: start building equity, benefit from potential property growth, stop paying rent. Downsides: higher interest costs from low equity premium, less financial buffer. If you can service the mortgage comfortably and property prices are rising faster than you can save, buying now often makes sense.
Yes, but banks typically want to see at least 50% of your deposit from genuine savings. Gifted money can make up the remainder. The gift must be non-repayable, and the donor usually needs to sign a statutory declaration confirming this.
Until your LVR drops to 80% (20% equity). This can happen through: 1) Paying down your mortgage, 2) Property value increases, or 3) A combination of both. Typically takes 2-5 years depending on market conditions and how much extra you pay off.
Options include: working with a mortgage broker who knows which lenders have the most flexible policies, improving your credit score over 6-12 months, reducing other debts, increasing your income, or finding a family guarantor.
Yes, but it's more challenging. You'll need at least 2 years of tax returns showing strong, consistent income, and ideally have an accountant prepare your financial statements. Some specialist lenders are more accommodating to self-employed borrowers.
Find out which low deposit loan option is right for you and get pre-approved today
Check Your Options NowLast updated: March 24, 2026 | Rates and information verified with Kāinga Ora, RBNZ