A 20% deposit has long been seen as the standard. It's certainly a helpful target, but it's not the only way into a home, and the rules can change.
Why 20% is talked about so much
A bigger deposit means you borrow less, which can mean lower repayments and can make it easier to get approved. Historically, lenders have asked for around 20%, so it became the number people aim for.
It's not always required
Many buyers purchase with less. What lenders ask for depends on the lender, the type of property and what's happening in the wider lending rules at the time. There are also options aimed at first home buyers with smaller deposits.
What else matters to a lender
- Your income and how stable it is
- Your other debts and regular expenses
- Your savings history
- How much you want to borrow relative to the value of the home
Don't forget the other costs
Your deposit isn't the only cash you'll need. Think about legal fees, reports, moving costs and a buffer for things that come up after you move in.
Quick tip
Lending rules and support for first home buyers change from time to time, including how KiwiSaver can be used. Speak to a lender or mortgage adviser for what applies today. If you don't have one, I'm happy to introduce you.
This is general information only, not legal, financial or building advice. Rules and market conditions change, so check the details with your lawyer, lender or the relevant authority before making decisions.
