New-build home loans in NZ: deposits, exemptions and payments

New builds are treated differently under the Reserve Bank’s lending rules. The research behind this site says new builds are exempt from the LVR restrictions and, from the Reserve Bank’s own launch statement as reported, from the debt-to-income restrictions too. We could not confirm the current wording on rbnz.govt.nz, which blocked our access, so treat the details as UNVERIFIED. An exemption means the loan does not count against the bank’s speed limits; it does not mean the bank must lend with a small deposit. In our example, a couple with an $80,000 deposit could borrow about $320,000 for an existing home at the standard 80% limit, but about $720,000 for an $800,000 new build if the bank lends at 90%. Banks decide; this is general information, not financial advice.

The new-build exemptions, as reported

The Reserve Bank limits how much high-LVR and high-DTI lending each bank can do. Some kinds of lending do not count against those limits. Here is what our research found about new builds, with its status.

The two windows (six months from completion, or six months from the code compliance certificate) can give different answers for a home finished some time ago, so if you are buying a recently completed home, ask your bank whether it counts as a new build for these rules. Our LVR guide and DTI guide explain the rules themselves.

Why the bank still sets your deposit

An exemption takes the loan outside the Reserve Bank’s speed limits. It does not set a minimum deposit, and it does not oblige the bank to lend. Each bank still decides how much deposit it wants on a new build and still tests whether you can afford the repayments at its test rate. Kiwibank’s building page says “the amount we’ll lend will depend on how much you earn, the size of your deposit” and other factors.

That is why our calculator, on the new-build path, asks you to choose the LVR the bank offers rather than assuming one. Low-deposit lending can also come with a low equity premium or higher rate at some banks; our low deposit guide lists the published premiums (Canstar, rates at 24 June 2026; UNVERIFIED, one source).

Worked example: an existing home vs a new build

A couple earns $130,000 ($65,000 each), takes home about $8,311 a month (2026/27 tax, ACC and 3.5% KiwiSaver), spends $3,200 a month on living costs, and has $10,000 of card limits and an $80,000 deposit. We test at the 6.94% average of the five banks’ test rates over 30 years.

The first two rows show the speed limit at work: on an existing home, 90% lending is possible only inside the 25% of new lending a bank may make above 80%, so it is rationed. The third row reaches the same $720,000, but outside the speed limit. The last row shows the DTI exemption: with a bigger deposit, serviceability binds at $772,937, which would be a DTI of 6.02 and slightly above the $770,000 that the DTI rule would otherwise allow. Living costs are this couple’s own figure, above our floor of $2,400 for two adults (our assumption, not a bank figure).

Because serviceability binds in that last case, the bank’s test rate decides the answer. At each bank’s published rate it would be $780,036 at ANZ and ASB (6.85%), $760,568 at BNZ (7.10%) and $772,154 at Kiwibank and Westpac (6.95%). On an existing home the DTI rule would cap all five at $770,000 unless the bank used its high-DTI allowance; on a new build, if the exemption applies as reported, it does not.

Progress payments: the loan is paid out in stages

When you build, the bank does not hand over the whole loan on day one. Kiwibank says “you can take it in chunks as building work progresses”, and that when you draw down funds it will need to see the builder’s invoices and “independent certification that the work being invoiced has been completed”. It “may also ask for interim valuations as the build progresses”, and after the work is complete it lists “a code compliance certificate” among the paperwork it needs.

Kiwibank adds: “By not drawing down your full loan in one go, you’ll save on interest payments.” Here is the scale of that, as an illustration. Suppose a $550,000 build loan is drawn in three stages over six months, and interest is charged at 6.31%, the average advertised floating rate across the five banks (rates as at 10 November 2026). The rate on your own construction loan may differ.

Drawing the full $550,000 from the start would cost $17,352.50 over the same six months, so staging saves about $6,310 in this example. This is simple interest on each balance, for illustration only. If you are still paying rent while you build, budget for both.

Fixed-price and turnkey contracts

The type of building contract affects both your risk and how the bank pays out. ASB’s guide to building contracts explains:

• Fixed price: “You and the builder agree on the total cost of building your home, based on your plans and your site.” Fixed price contracts “usually set out a schedule of progress payments”, with common milestones “when you give the go ahead for the project, when earth works are complete”, and later when the framing is up, the roof is on and the project is complete. ASB says a fixed price contract “gives you more certainty with costs than a labour-only contract”.
• Turnkey: “You normally pay an initial deposit, with the remainder due when you take legal possession.”

Things to check with your lawyer and bank before you sign: what the contract price leaves out, how variations are approved, what happens if the builder runs late or fails, and whether the payment schedule matches what the bank will release at each stage.

Investors: the research we rely on does not limit the new-build exemption to owner-occupiers, which could matter a lot given the usual 30% investor deposit, but check with your bank; see our investor lending rules. First home buyers can see where building fits in our first home buyer steps.

Rates as at 10 November 2026; test rates confirmed July 2026.

Questions people ask

Do I need a 20% deposit for a new build in NZ?

Not necessarily. New builds are reported to be exempt from the Reserve Bank’s LVR speed limits, so a bank can lend with a smaller deposit outside its quota. Each bank still sets its own deposit requirement. The exemption wording is UNVERIFIED on rbnz.govt.nz.

Are new builds exempt from DTI limits?

At launch in May 2024 the Reserve Bank said the main DTI exemptions would be for newly constructed dwellings and Kāinga Ora loans, as reported. We could not confirm the current wording on rbnz.govt.nz.

How do progress payments work?

The bank releases the loan in stages as building work is done. Kiwibank asks for invoices and independent certification at each drawdown, may ask for interim valuations, and needs a code compliance certificate at the end.

What is a fixed-price building contract?

ASB describes it as an agreement on the total cost based on your plans and site, usually with a schedule of progress payments at milestones. It gives more cost certainty than a labour-only contract.