The honest answer is: it depends which door you want to walk through. There are three practical deposit levels in New Zealand, and each corresponds to a different lending pathway.
20% — the standard door
At 20% you are inside the Reserve Bank's standard loan-to-value threshold for owner-occupiers. Banks compete for you, you avoid low-equity premiums and margins, and approval is more straightforward. On a $700,000 home that is a $140,000 deposit.
10% — possible, rationed, and priced
Banks are allowed to write only 25% of their new owner-occupier lending above 80% LVR, so low-deposit loans are rationed. Expect a low-equity premium or margin (often roughly 0.25–0.75% extra on the rate, or a one-off fee), more conditions, and slower processing. On the same $700,000 home a 10% deposit is $70,000 — but the loan is $630,000, and at a higher effective rate.
5% — the First Home Loan route
The Kāinga Ora First Home Loan lets eligible buyers purchase with a 5% deposit. It is exempt from the LVR restrictions and the DTI cap, but has income caps — $95,000 for a single buyer with no dependants, $150,000 otherwise — and a Lender’s Mortgage Insurance premium on top of the loan (see Kāinga Ora for the current rate). A 5% deposit on $700,000 is $35,000.
Don't forget the costs beside the deposit
- Legal and conveyancing: typically $1,500–$3,000
- Builder's report and LIM: several hundred dollars each, sometimes on more than one property
- Moving costs, insurance from settlement day, and a buffer for the first months
A deposit that empties every account to the last dollar is not really a deposit at that level — lenders also look for evidence you can hold savings after settlement.
A worked example
Suppose you and a partner target a $650,000 first home. 20% is $130,000, 10% is $65,000, 5% is $32,500. With $45,000 of withdrawable KiwiSaver between you and $20,000 of cash, you have $65,000 — exactly 10%. The planner shows the gap to each threshold and how long your current saving rate takes to close it, which turns “how much do I need?” into “when will I be ready?”.