Date: 28th Sep 2026

How much do you need to save for a house deposit?

A buyer's guide to saving for your deposit

Buying your first home is one of the biggest (and most exciting) financial decisions you’ll ever make. But before you start perusing open homes for that perfect property, there's an important hurdle to clear: saving for your house deposit.

While a traditional house deposit is 20% of the property's total price, some first-home buyers can get a home loan with a much smaller deposit — as low as 5%. You might be able to buy a house much sooner than you'd expect!

This guide will help you understand how much you need for a home deposit and how to save for your new home.

What is a house deposit?

A house deposit is the sum of money you save and contribute toward the purchase of a residential property. Because house purchase prices are so high, most people don't pay the full amount upfront. Instead, they take out a home loan through a bank or lender to cover the remaining amount.

This is where your home deposit comes in. Your house deposit is the difference between the property price and the loan amount. The larger your deposit, the less you need to borrow, which reduces the lender's risk and typically results in better interest rates and fewer fees for you.

A home loan deposit isn’t the same thing as a sales deposit. You pay the sales deposit (around 10% of the property price) to the real estate agent after signing the sale and purchase agreement.

How much do I need to save for a house deposit?

The 20% rule

The minimum deposit required for home loans is typically 20% of a property's purchase price. For instance, if you want to buy a $500,000 property, you’d need to put down a 20% deposit of $100,000.

Some lenders can provide loans for lower deposits, but you might not have access to preferential interest rates. This means you’ll have a higher interest rate and higher mortgage repayments overall.

Additionally, having a minimum 20% deposit makes your financial situation look stronger, strengthening your application.

5% deposit First Home Loan

Kāinga Ora's First Home Loan scheme allows eligible buyers to secure a home loan with a 5% minimum deposit. That means you can apply for a home loan with less money on hand.

To qualify for this first home deposit scheme, you'll need to meet specific eligibility criteria:

• Income caps: Under $95,000 (single), $150,000 (single with dependants), or $150,000 (couple)
• Property size criteria: The property must be less than 1 hectare
• Intention to live in the property: Investment property purchases don't qualify
• Citizen/resident status: Be a New Zealand citizen, permanent resident, or resident visa holder who is "ordinarily resident in New Zealand"

First Home Loans are available through participating lenders and underwritten by Kāinga Ora. Your lender may have additional lending criteria for applying and will make the final lending decision. Additionally, you will have to pay a 1.2% Lender’s Mortgage Insurance premium.

Tips for saving for your house deposit

Getting your house deposit together takes time and dedication, but these practical strategies can help you reach your goal faster:

• Pay off existing debts first: Tackle high-interest rate credit cards and personal loans first. Lenders assess your credit history when deciding how much to lend, so reducing existing debt frees up more of your income for home loan repayments.
• Create small saving habits: You don't need to save huge amounts at once — small, consistent contributions add up over time. Set up automatic transfers from your pay to a dedicated savings account.
• Use KiwiSaver strategically: If you've been contributing to your KiwiSaver account for at least three years, you can make a KiwiSaver first home withdrawal. Combined with government contributions of 25 cents for every dollar you contribute (up to $260.72 per year) and employer contributions, KiwiSaver savings can help a lot with securing your first home loan.

Find more tips in our guide to saving for your first home.

Frequently asked questions

How long should it take me to save for a house deposit?

There's no one-size-fits-all answer to how long you need to save for your house deposit. The timeline depends on your income, expenses, existing debt, and how much you can save each month. Some first-home buyers reach their deposit goal in 3-5 years, while others take longer.

Do I always need a 20% deposit to buy a house?

20% is the traditional benchmark for a mortgage deposit, but Kāinga Ora's first home loan lowers the minimum deposit for a house to 5%.

Some other lenders also offer low-deposit home loans in the 7–10% range. Your eligibility depends on income, credit history, and the lender's specific home loan eligibility criteria. Speak to your lender about pre-approval options.

What other costs should I consider when buying a home?

Your house deposit is just one part of the equation. You should also budget for:

• Legal and conveyancing fees
• Building inspection reports
• Mortgage insurance (if applicable with low deposit arrangements)
• Council rates
• Home and contents insurance
• Ongoing maintenance costs
• Moving costs

Ready to take that next step towards first home ownership?

Saving up for a house deposit is the first step toward homeownership. Whether you're aiming for a traditional 20% deposit or exploring a lower-deposit option, having a clear plan and understanding your financial position makes the process less daunting.

If you want to buy a home in New Zealand, explore the latest property listings on Tremains. We serve clients across Rotorua, Hawke’s Bay, Taupo, and the rest of the central North Island. Get in touch with a real estate agent to discuss your next step.