How much deposit do you need to buy a house in Dunedin
It's the first question almost every buyer asks us, and the honest answer is this… it really depends!
It depends on your situation, the type of property you are looking to buy, and which lender you go with. There isn't one number that applies to everyone, but that's actually a good thing, because there are more options available than most people realise.
Here's a breakdown of what deposit you might need in Dunedin right now, depending on your circumstances.
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The standard 20% deposit
This is the figure most first home buyers have in mind, and for most existing homes, banks still work off a 20% deposit as the benchmark. On a $600,000 home, that's $120,000, which can feel like a lot for a first home buyer, especially with rent and living costs on top
Thankfully, that’s not your only option
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Low deposit lending: banks are more flexible than you'd think
Here's something that surprises a lot of buyers, banks have lending limits that allow them to write a portion of their lending to low deposit borrowers each quarter. That means some banks are actively looking for good low deposit applicants to fill that allowance, rather than turning them away.
What this looks like varies bank to bank and changes depending on how much lower deposit lending they have available. This is exactly where having a mortgage adviser matters. We know which banks currently have room to lend at a lower deposit, so you're not wasting time applying somewhere that's already full for the quarter.
It’s also a good idea to keep in mind that the lower the deposit, the more the banks are looking at your income and spending, so taking the time to build a stable income, a clean credit history, and being sensible with your spending will go a long way - again a mortgage advisor can advise you on this.
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5% deposit with the Kainga Ora First Home Loan
If you meet the eligibility criteria, the Kainga Ora First Home Loan is one of the most accessible options available, allowing a deposit as low as 5% through a participating lender. It's designed specifically for first home buyers who have a steady income and can service a mortgage, but haven't yet been able to save a large deposit.
There are income caps and property price caps that apply, so it's worth checking your eligibility rather than assuming you won't qualify.
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Flexible deposit options with a new build
This is one of the biggest deposit advantages going, and one a lot of buyers don't know about. Properties that qualify as new builds are typically exempt from the usual loan-to-value (LVR) restrictions that apply to existing homes. In practice, that means
- Lower deposits are often possible on new builds, sometimes as low as 10% or less depending on the lender
- Banks are generally more willing to lend on new builds because of this exemption
- It can open up options for buyers who'd otherwise be priced out of an existing home in the same area
If building or buying off the plans is something you'd consider, it's worth weighing this option up against an existing home purely from a deposit standpoint, as the numbers can look quite different.
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Can I use KiwiSaver towards my deposit?
Yes. If you've been contributing to KiwiSaver for at least three years, you may be able to withdraw most or some of your balance to put towards your first home, provided you meet the eligibility criteria.
Many first home buyers combine both their KiwiSaver with their own savings to create their home deposit.
If you're not sure how much you could access, this is one of the things a mortgage adviser can check for you and it can often change the whole timeline.
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So, how much deposit do you actually need?
Realistically, it comes down to:
- The type of property, because existing vs new build changes the picture significantly
- Your eligibility for schemes like the Kainga Ora First Home Loan
- Which bank you apply with, and whether they currently have room on their low deposit lending
- Your income and ability to service the loan, which matters just as much as the deposit itself
The best way to know exactly where you stand is to talk it through with a mortgage adviser before you start house hunting. We'll look at your full situation, work out which lenders and schemes you're likely to qualify for, and help you understand what deposit you genuinely need, rather than assuming it's 20% and ruling yourself out too early.
Ready to find out what deposit you need? Get in touch with the team at Loan Market Dunedin for a free chat about your options.
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Buying a home in Dunedin - FAQ’s
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What is the minimum deposit to buy a house in NZ?
For most existing homes, banks typically require a 20% deposit. However, some buyers may qualify for lower deposit lending, and the Kainga Ora First Home Loan allows for as little as 5% for eligible buyers.
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Can I buy a house in Dunedin with a 5% deposit?
Yes, if you meet the eligibility criteria for the Kainga Ora First Home Loan, which is designed for first home buyers who can service a mortgage but haven't saved a large deposit.
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Is it easier to get a loan for a new build?
New builds are generally exempt from standard loan-to-value restrictions, which often means more flexible deposit options compared to existing homes.
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Why do some banks accept lower deposits than others?
Banks are allowed to lend a portion of their total lending to low deposit borrowers each quarter. How much room they have left to do this varies bank to bank and changes over time, which is why speaking with a mortgage adviser can help you find the right fit.
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Do I need a 20% deposit to buy my first home?
Not necessarily. Between low deposit lending, new build flexibility, and schemes like the Kainga Ora First Home Loan, many first home buyers are able to buy with less than 20%.
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