How much do I have to save for my deposit?

23 February 2018

Dreaming of a place to call your own?

Surviving on a shoestring in your flatting years is a rite of passage for so many Kiwis, with buying a house being the next natural progression for many. It’s a big step to take though and these days it’s a huge leap for many of us, given how much house prices have risen.

Getting your deposit together is the starting point and in most cases you’ll need 20% of the value of the home. The higher the purchase price, the bigger the deposit!

The actual deposit amount will therefore be higher in areas where median house prices are also higher. A 20% deposit in Otago could be around $95,000 — in Auckland you might need more than twice that amount.

The map below provides an overview of the average deposit amount needed across New Zealand, and assumes a 20% deposit is needed. 

Source: REINZ Residential Statistics Report for January 2018, Real Estate Institute of New Zealand.

Why do I need a 20% deposit?   

Since 2016, banks have been restricted as to how much money they can lend to buyers with a low deposit. These restrictions — referred to as LVRs (loan-to-value ratios) — mean that, in most cases you will need at least a 20% deposit to buy a house.  A super tough ask in this day and age, but there is hope…  

Getting to 20% with the power of KiwiSaver

KiwiSaver can get you into your first home quicker by allowing you to withdraw most of your savings for the purchase of your first home — find out more about the rules for using KiwiSaver for your first home deposit. If you’re buying a first home with a partner, you can both withdraw funds from your KiwiSaver accounts.

KiwiSaver can also help you supercharge your retirement savings. Did you know for every $1 you put into your KiwiSaver account, the Government puts in 50 cents — up to $521.43 a year.

To be eligible you need to be making contributions to your KiwiSaver account, aged between 18 and the age of eligibility for NZ Super (currently 65) or have been a member for five years, whichever is the later. Find out more about how the Government Contribution works.

If you’re employed, you’ll also benefit from contributions your employer will make into your KiwiSaver account.

Want to join the AMP KiwiSaver Scheme?

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When a 10% deposit might be enough

Saving a 20% deposit for your first home can be a struggle. However in some circumstances, the deposit required may be less than 20%.

A Welcome Home Loan*, for example, requires a minimum 10% deposit. If you meet the Welcome Home Loan criteria, getting into your first home may be that much easier

Welcome Home Loans are low-deposit home loans which could help get you onto the property ladder if:

  • You’re buying your first home;
  • You’ll live in the home you are buying;
  • You have at least a 10% deposit;
  • Your annual household income before tax is $85,000 or less for one borrower, or $130,000 or less for two or more borrowers;
  • The house you are intending to purchase is below the house price cap for the area;
  • You’re a New Zealand citizen or permanent resident.

Your mortgage broker or Adviser can help you apply.

*Welcome Home Loan supported by Housing New Zealand

What about the HomeStart grant?

You may also be eligible for a KiwiSaver HomeStart grant. This gives first-home buyers a grant of up to $5,000 for individuals and up to $10,000 where there are two or more eligible buyers, to put towards the purchase of an existing or older home.  For a new home, the grant goes up to $10,000 for individuals and $20,000 for two or more buyers.  

Contact an Adviser to find out more or go here

What other costs do I need to budget for?

While your home loan may be your biggest single expense, there are a number of other costs to be aware of and plan for. These include:

  • Legal fees;
  • Loan application fee;
  • Insurance;
  • Builder’s report;
  • Cost of moving;
  • Ongoing costs such as maintenance and rates.  

Important information

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AMP Wealth Management New Zealand Limited is the issuer of the AMP KiwiSaver Scheme. For a copy of the AMP KiwiSaver Scheme Product Disclosure Statement or Fund Update Booklet please visit

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