Low deposit home loans in NZ: borrowing with under 20%

You can buy a home in New Zealand with less than a 20% deposit, but only two ways: within a bank's low-deposit allowance (the Reserve Bank lets banks make up to 25% of new owner-occupier lending above 80% LVR, since 1 December 2025), or with a Kāinga Ora First Home Loan and a 5% deposit if you qualify. Banks usually charge extra above 80%. One snapshot of published low equity premiums (Canstar, rates at 24 June 2026, UNVERIFIED) shows 0.75% a year at 85% to 90% LVR, about $5,063 a year on a $675,000 loan. Banks decide; this is general information, not financial advice.

The two routes to a low deposit

A third route, a new build, is reported to be exempt from the LVR limits too, though the bank still sets its own deposit. See new build lending. And family can help close the gap; see buying with family.

How the speed limit works for you

The Reserve Bank rule caps the share of each bank's new owner-occupier lending that can go above 80% LVR at 25% (up from 20% before 1 December 2025). The Reserve Bank kept that setting in its August 2026 review. For investors the cap is 10% of new investor lending above 70% LVR.

The rule is on the bank, not on you, so there is no fixed answer to "will they lend me 90%?". It depends on whether the bank has room in its allowance when you apply, and on your application. Expect the bank to look closely at your income, your spending, your savings record and your other debts, and to want a registered valuation: Sorted says lenders usually require one above 80% LVR or for private sales.

A low-deposit loan still has to pass the other two limits: serviceability at the bank's test rate (6.85% to 7.10%, test rates confirmed July 2026) and the DTI limit of 6 times gross income. A small deposit with a big loan often runs into one of them. Our calculator has a low-deposit option to test all three.

Low equity premiums and margins (UNVERIFIED ranges)

Above 80% LVR, Sorted says lenders "usually charge a low-equity premium or mortgage indemnity insurance, and may add a margin". Banks take one of two approaches:

• A low equity premium (LEP): an extra percentage a year on the loan, on top of the interest rate, stepping up as the LVR rises.
• A higher interest rate: the bank's standard rates instead of the special rates it offers with 20% equity.

The figures below come from one Canstar snapshot, with rates correct at 24 June 2026. We could not confirm them on the banks' own pages, so treat them as UNVERIFIED and check with the bank.

You can see the rate gap in the published rates too. As at 10 November 2026, ANZ's standard two-year rate was 5.95% against a special rate of 5.35% for loans under 80% LVR, and Kiwibank's was 6.29% against 5.39% (interest.co.nz, a single source). Because premiums are set by LVR band, they are tied to your loan being above 80% of the value; each bank sets its own rules for reviewing or removing them, so ask.

Worked example: a $750,000 home

What the extra cost looks like on a $750,000 home, using the Canstar premiums above (UNVERIFIED). Yearly cost is the premium times the loan; it falls as the loan is repaid.

At ANZ and Kiwibank the cost shows up as a higher rate instead. As a rough first-year guide on the $675,000 loan, a margin of about 0.60% is about $4,050, and 0.70% to 0.90% is about $4,725 to $6,075.

Compare the First Home Loan on the same home with a 5% deposit: a premium of 1.2% of $712,500, or $8,550, or $7,125 at Kiwibank's 1.00%. That premium can be paid upfront or across the life of the loan, and Kiwibank says its fee can be added to the loan. The First Home Loan route also lets you use the special rates at some lenders: Kiwibank's special rates apply "with at least 20% equity, or with a Kāinga Ora First Home Loan". See our First Home Loan guide.

Before you apply with a low deposit

• Check all three limits. A low-deposit loan still has to pass serviceability at the bank's test rate and, unless exempt, the DTI limit of 6 times gross income. Run your figures through our calculator with the low deposit option.
• Check the First Home Loan first. If your income is within $95,000 (one buyer without dependants) or $150,000 (one buyer with dependants, or two or more buyers), the First Home Loan does not depend on a bank's speed-limit room.
• Price the extra cost. Ask each bank for its premium or rate at your LVR, in writing. The Canstar figures above are a June 2026 snapshot (UNVERIFIED).
• Allow for a valuation. Lenders usually want a registered valuation above 80% LVR (Sorted); the ranges we found are about $700 to $1,500.
• Keep a buffer. With little equity you have less room to borrow against the home later, so savings set aside for emergencies matter more.
• Get pre-approval. A pre-approval tells you whether a bank has room and appetite for your loan before you bid. A mortgage adviser can compare lenders.

Low deposit now, or save longer?

There is no single answer, and we do not forecast house prices or rates. The trade-offs to weigh:

• Cost. A premium or higher rate adds thousands a year until your equity reaches 20%. Saving longer avoids it but means paying rent meanwhile.
• Risk. With 5% or 10% equity, a fall in values could leave you owing more than the home is worth, which makes it harder to refinance or sell.
• Room to borrow. A bigger loan on the same income pushes you closer to the serviceability and DTI limits, leaving less buffer.
• Access. A bank's low-deposit allowance can be used up; a First Home Loan does not depend on it, but has income caps and fewer lenders.

Our saving a deposit guide works through how long each step takes, and the deposit calculator shows what you have, including KiwiSaver. Upfront costs come on top: see buying costs.

Banks decide; this is general information, not financial advice.

Questions people ask

Can I get a home loan with a 10% deposit?

Yes, if a bank has room within its speed limit and accepts your application. Banks may make up to 25% of new owner-occupier lending above 80% LVR (since 1 December 2025). Expect a low equity premium or a higher rate.

How much is a low equity premium?

One Canstar snapshot (rates at 24 June 2026, UNVERIFIED) shows ASB, BNZ and Westpac charging 0.25% to 0.35% a year at 80% to 85% LVR, 0.75% at 85% to 90%, and 1.20% to 1.50% at 90% to 95%. ANZ and Kiwibank charge higher rates instead.

Is a 5% deposit possible without a First Home Loan?

Banks can lend at 95% inside their speed limit, and the published premiums are highest in that band, but whether a bank will for you is its call. The Kāinga Ora First Home Loan is the main 5% route for eligible buyers.

Does the low equity premium last for the whole loan?

The premium is set by LVR band, so it is tied to your loan being above 80% of the property's value. Each bank has its own rules for reviewing or removing it, so ask yours.