Home Loan Deposit Explained

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Your home loan deposit is a crucial part of getting a mortgage that works for you – whether you are a first home buyer or making a property investment. The deposit is the amount you put upfront for a home loan from savings or gifts. The more you pay now in a deposit, over time the less interest you’ll end up paying overtime because you will repay your mortgage over a shorter period.

Understanding the New LVR Restrictions

The Reserve Bank sets regulations on the housing market, including a Loan-to-Value (LVR) restriction on banks and lenders. As of October 2013, they placed a restriction on property investment by requiring at least a 20% deposit in New Zealand and 30% within Auckland City Council. This means that for many people who don’t have that amount of cash at their disposal, buying a new home may seem out of reach.

In June 2023 the Reserve Bank changed the rules again, allowing more First Home Buyers to purchase with a less than 20% deposit. Ask iLender for details.

But that’s not the whole story! iLender can still help borrowers who only have a 10% deposit, making getting a mortgage more easily achievable for first home buyers. In order to encourage housing development outside of Auckland, loan restrictions are lower if you build a new home or buy one off-plan.

Where Can A Deposit Come From?

Personal savings

The most straightforward deposit source is personal savings. We recommend using budgeting tactics to save for your deposit.

Gifted Deposits

Buying a house these days can be tough for younger workers and many first home buyers get help from their family or friends through monetary gifts. These can be used as part of your deposit to reach your 10% minimum.


If your family wants to help you put a deposit on a house but does not have the liquid assets to do so, they can use the equity on their own property to guarantee a home loan deposit.

Many Lenders will insist on the family going as co-borrowers and will require independent legal advice. Just ask us for the options available.

KiwiSaver Funds

You can use your KiwiSaver account as part of your deposit if you are a first home buyer. Learn more about using your KiwiSaver funds.

iLender has low deposits on home loans for first home buyers and property investors. We offer home loans for people with poor credit, and can help you access all your available deposit sources.

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