For years, the 20% deposit has been treated as the price of entry to home ownership. It’s the number most first home buyers fixate on, and for many, it’s the reason they think buying is still years away.
It’s also getting a bit easier to save that deposit. On average, it now takes just under 9 years to save a 20% deposit, back to normal levels after peaking during the 2021 boom, and mortgage repayments are taking up less of the average household’s income than they were a few years ago.
And the 20% figure itself isn’t as fixed as it looks. Recent Reserve Bank data shows that more than half of first home buyer loans in January and February 2026 were approved with less than a 20% deposit. Most first home buyers aren’t waiting to hit that mark before they buy.
Here’s what’s actually available if your deposit isn’t quite there yet.
The banks have room to lend below 20%
The Reserve Bank sets loan-to-value ratio (LVR) rules that limit how much low-deposit lending banks can do. Under the current settings, banks can allocate up to 25% of their new owner-occupier lending to borrowers with less than a 20% deposit. That’s real headroom, and it means a 10% deposit isn’t automatically off the table with a mainstream lender, particularly if the rest of your financial position is solid.
New builds come with a different set of rules altogether
If you’re buying a new build, or a recently completed property from the developer within six months of completion, the LVR restrictions don’t apply to your loan at all. Banks can lend up to 90% of the property’s value, meaning a 10% deposit is possible without competing for a bank’s limited low-deposit allowance. Some lenders will go even lower on new builds, though that can come with a higher interest rate attached.
Kāinga Ora’s First Home Loan can take you down to 5%
For eligible buyers, a deposit of just 5% may be enough through the First Home Loan scheme. Participating banks issue the loan with a government guarantee behind it, courtesy of Kāinga Ora. You’ll still need to meet the scheme’s eligibility rules as well as the lender’s own criteria, and it’s worth keeping an eye out for any changes to the scheme’s income caps following this year’s general election.
Your deposit doesn’t have to come from savings alone
Most first home buyers aren’t funding their whole deposit out of their own pocket. A KiwiSaver withdrawal can go a long way toward a deposit, and family gifting is common too, though it’s worth getting independent advice before any family money changes hands, so everyone understands what’s expected.
The catch worth knowing
None of this makes a low-deposit loan the same as a 20% deposit loan. Borrowing above 80% of a property’s value usually means a higher interest rate, and possibly a low-equity or low-deposit premium on top. It’s not a free pass, it’s a trade-off, and the right call depends on your income, your goals and how quickly you’d rather be in a home versus how much you’d rather save first.
Where an adviser comes in
Every one of these pathways has its own eligibility rules, price caps and lender quirks, and they change over time. If you’re hoping to buy but a 20% deposit feels out of reach, get in touch, we can talk through your circumstances and find out what’s realistic for you.
