Saving a deposit for a house

If you’re saving for a deposit on a house, find out how much you might need and discover ways to help you reach your goal.

5 minute read

When you’re buying a property that you plan to live in, banks are more likely to lend to you if you have a deposit that’s at least 20% of a home’s value. So if you’re looking at a $700,000 home, you’d need $140,000 as a deposit.

Less than 20% deposit

If you don’t have a 20% deposit, you may still be able to buy a home, but you might have to pay a premium (called a low equity interest rate premium). Make sure you get in touch with your bank to talk through your options.

Do the maths on your home loan

Borrowing calculator

Work out how much you could borrow, so you know how much you could afford to spend on a new home.

Repayment calculator

Calculate your home loan repayments based on the cost of a home and the deposit you’ve got. You can change the mortgage term to see how that affects what you pay, and you can increase the interest rate to check you could still afford the repayments if interest rates go up.

Owning a home calculator

Work out the real cost of owning a home by adding up your potential repayments, insurance, rates, body corporate fees and more. Sorted.org.nz has a great budgeting tool for this.

Ways to get your deposit together

Now you know what your goal is, it’s time to start some serious saving. Here are some of the ways you can get your deposit together.

KiwiSaver

If you’ve been a member of a KiwiSaver scheme for 3+ years and meet the eligibility criteria, you may be able to apply to withdraw most of your KiwiSaver savings to put towards your first home. You need to leave at least $1,000 in your KiwiSaver account, and you can’t withdraw any Australian superannuation funds you may have transferred. You should get in touch with your KiwiSaver provider early – it can take some time to get your savings.

If you plan to use your KiwiSaver savings to buy a first home, it’s worth checking you’re in the right fund. The BNZ KiwiSaver Scheme^ has a fund designed for first home buyers, who are planning to withdraw their savings within three to five years.

[/pullout]

Help from family

Your parents or other family members might be able to help by gifting you money or guaranteeing your loan.

If you’re given money, you’ll usually need to show proof it’s not borrowed and that it won’t need to be paid back. If a family member guarantees your loan, their home is used as security and they’re responsible if you can’t make your repayments.

Savings and investments

If you’ve just started thinking about buying, it’s smart to make your money work harder. We have a range of savings and investment options including an interest earning savings account, a term deposit, or a managed fund. If you want to use your savings in the next little while, make sure you choose an option that suits your investment goals and time frames.

It’s also good to do a weekly budget, and put any money you don’t need into your savings as soon as you’re paid. Calculate how long it’ll take to reach your goal with our savings calculator.

Got your deposit, what’s next?

Once you’re close to having your deposit ready, the next step is to talk to your bank about getting conditional approval (or pre-approval). That kick starts the home loan process, and means you can start looking for your new home.

Applying for a home loan

Here’s what you need to know about applying for a home loan (often called a mortgage).

Finding a home

Buying a home is one of the biggest and most exciting purchases you’ll ever make. With that in mind, here are some things to consider along the way.

Making an offer

You’ve found the house you want. Here are the three most common ways to make an offer, and an outline of what you need to do before you make your offer.

Related tools

Savings goal calculator

Calculate how much you could borrow

Home loan repayment calculator

Use our home loan calculators

Home loan calculators

Lending criteria, terms and fees apply.

This material is for general information purposes only and does not constitute, and is not intended as, personalised financial advice or as a replacement for legal advice. BNZ strongly recommends you seek advice specific to your personal financial or legal situation from a qualified adviser.