LVR and deposit rules in NZ: how much deposit you need

The loan-to-value ratio (LVR) is your loan as a share of the property's value. Under the Reserve Bank settings in force since 1 December 2025, banks may make up to 25% of new owner-occupier lending at an LVR above 80% (a deposit under 20%) and up to 10% of new investor lending above 70% (a deposit under 30%). The Reserve Bank kept these settings at its August 2026 review. For a $750,000 home that means a deposit of $150,000 for standard owner-occupier lending, or $225,000 for an investor. Kāinga Ora loans and, as reported, new builds are exempt. Banks decide; this is general information, not financial advice.

What LVR means

LVR is the loan divided by the value of the property. Borrow $600,000 to buy a $750,000 home and your LVR is 80%; your deposit is the other 20%. The lower the LVR, the bigger your stake and the less risk for the bank.

Some quick conversions: a $637,500 loan on a $750,000 home is an 85% LVR (a 15% deposit), $675,000 is 90% and $712,500 is 95%. Banks price low-deposit loans in LVR bands like these, so a slightly bigger deposit can move you into a cheaper band. Your KiwiSaver first-home withdrawal counts towards the deposit, which is often what gets first home buyers across a band line.

The value matters as much as the loan. Sorted notes that lenders usually want a registered valuation above 80% LVR, or for a private sale.

The current settings (since 1 December 2025)

The Reserve Bank announced the easing on 14 October 2025 and it took effect on 1 December 2025. Its Financial Policy Committee kept the settings in its August 2026 review (reported 14 August 2026), with the next review planned in about 12 months, though it could come sooner. Some older pages online still show earlier limits, such as 15% and 5%; those are out of date.

We read these settings in news reports of the Reserve Bank's releases (interest.co.nz, MPA and a published copy of the release); the Reserve Bank's own site blocked our automated checks, so confirm on rbnz.govt.nz if a detail matters to you.

Speed limits are on banks, not on you

The LVR rules do not say you must have 20%. They say each bank can make only a set share of its new lending above 80% (or 70% for investors). Inside that allowance, a bank can lend at 90% or even 95% to borrowers it chooses.

That has three practical effects:

• Access varies. Whether a bank has room for a low-deposit loan depends on how much of its allowance it has used. It can change from month to month.
• Banks choose. With limited room, each bank decides which low-deposit applications to accept, on its own criteria.
• It usually costs more. Above 80%, banks usually charge a low equity premium or a higher interest rate. Our low deposit guide covers the costs.

Worked example: what a deposit supports

The most a deposit supports at a given LVR is the deposit times LVR ÷ (1 minus LVR). For a $100,000 deposit:

The deposit is only one of three limits. At 90% or 95% the loan quickly outgrows what most incomes can service at the bank's test rate (6.85% to 7.10%, test rates confirmed July 2026) or the DTI limit of 6 times income. So in practice a smaller deposit often means a smaller loan than this table suggests. Our borrowing calculator checks all three.

Turned round, here is the deposit needed for a $750,000 home:

Use the deposit calculator for your own price, including a KiwiSaver first-home withdrawal.

When a bigger LVR does not mean a bigger loan

Take a couple earning $200,000 between them, with two children, living costs of $4,500 a month, $20,000 of card limits and a $150,000 deposit. Our engine, at the 6.94% average test rate (test rates confirmed July 2026), gives:

At 80% the deposit holds them to $600,000, a price of $750,000. If a bank lent at 90% inside its speed limit, the deposit would no longer bind and serviceability would take over at about $1,130,977, usually with a low equity premium on top. For most households, moving from 80% to 90% raises the deposit limit far faster than income can keep up. Our how much can I borrow guide runs three households through all three limits.

For investors the arithmetic is tighter: at 70% LVR a $100,000 deposit supports a loan of only $233,333. See our investor lending guide.

Exemptions

Some loans sit outside the LVR speed limits. Our research found the following; none of it could be read on rbnz.govt.nz, which blocked automated access, so the wording is as reported:

• Kāinga Ora loans, including First Home Loans. Exempt, per two sources (a Reserve Bank page seen in search results and a secondary summary). This is why a First Home Loan can be made with a 5% deposit. See our First Home Loan guide.
• New builds. The Reserve Bank's 2021 release described an exemption for buying a new home from a developer "within six months of completion", and construction lending was exempt. A 2024 Reserve Bank draft lending standard tied the window to 6 months after the code compliance certificate. We could not confirm which wording applies now. See new build lending.
• Refinancing at the same or a lower loan amount, plus specific treatment for bridging loans and remediation work. Reported by secondary sources; not confirmed on official text.

An exemption lets a bank lend above 80% without using its speed-limit allowance. It does not make the bank lend: it still applies its own deposit policy, serviceability test and the DTI rule (where that applies).

Getting to 20%

For most buyers the cheapest route is still a 20% deposit: no low equity premium, access to the banks' special rates (several banks show lower rates for borrowers with at least 20% equity, rates as at 10 November 2026) and no reliance on a bank's speed-limit room. Ways to get there:

• Save, and use KiwiSaver. After 3 years of membership you can usually withdraw all but $1,000 for a first home. See our KiwiSaver withdrawal guide and saving a deposit.
• Family help. Gifts, guarantees and co-ownership each work differently; see buying with family.
• A cheaper first home. The deposit you need scales with the price.

Remember the upfront costs on top of the deposit (lawyer, LIM, building inspection, sometimes a valuation). Our buying costs guide lists them. Banks decide; this is general information, not financial advice.

Questions people ask

Can KiwiSaver count towards a 20% deposit?

Yes. A KiwiSaver first-home withdrawal (after 3 years of membership, leaving $1,000 in the account) is part of your deposit, alongside savings. See our KiwiSaver withdrawal guide.

Do I need a 20% deposit to buy a house in NZ?

Not always. Most owner-occupier lending is at 80% LVR or less, but banks may make up to 25% of new owner-occupier lending with a smaller deposit, usually with a low equity premium. A Kāinga Ora First Home Loan needs 5% if you qualify.

How much deposit does an investor need?

Usually 30%. Since 1 December 2025 banks may make up to 10% of new investor lending with less than 30%. New builds are reported to be exempt.

What changed on 1 December 2025?

The speed limits rose: from 20% to 25% of new owner-occupier lending above 80% LVR, and from 5% to 10% of new investor lending above 70% LVR. The 80% and 70% thresholds stayed the same.

Are new builds exempt from LVR rules?

They are reported to be. The Reserve Bank's 2021 wording referred to buying from a developer within six months of completion, and a 2024 draft tied it to six months after the code compliance certificate. We could not confirm the current wording on rbnz.govt.nz.