Getting a Deposit

How to get a deposit

Getting together a deposit can often be the hardest part about buying a house. With house prices and therefore deposit amounts getting higher there are a number of ways that you can get a deposit together for your first home.

  • Savings – your own savings is the traditional way of getting a deposit for your own home. This is the ideal option as it show the bank you have a good savings history and means you have instant equity in your home
  • Gifted deposit – banks will accept money gifted to you as a home loan deposit (such as a gift from a parent or family member)
  • KiwiSaver HomeStart Grant – After a minimum of three years the new KiwiSaver HomeStart grant also provides eligible first-home buyers with a grant of up to $5,000 to purchase their first home or up to $10,000 if they are purchasing a new build. If you are buying property with someone else who is also a member of Kiwisaver, they too may be eligible for a Kiwisaver HomeStart grant.
  • KiwiSaver Savings Withdrawal – After a minimum of three years membership of a KiwiSaver scheme you may be able to withdraw your savings, employer contributions and all returns (cannot withdraw Government contributions including $1000 kick start). The draw back of this option of course is that you decrease your savings towards your retirement.
  • Other borrowing – Some institutions may also allow you to use other borrowing such as from family or friends, a personal loan or credit card to supplement your deposit, however, we would highly discourage this as it increases your total debt.
How much do I need for a deposit?

Banks must now ensure that a the majority of their lending is has a 20% deposit. Low deposit amounts (ie 5 – 19.9% deposit) can attract additional fees. Lenders may also have different deposit requirements for different types of properties (e.g. investment properties).

The exception to this is the Welcome Home Loan which only requires a 10% deposit.

Saving for your first home

Getting a deposit for your first home isn't rocket science but it can take time and a bit of hard work