No Deposit Home Loans in NZ: What's Actually Possible

The Reality: No Bank Lends 100% Without Security

That's not one bank's policy — it's the Reserve Bank's rule. LVR restrictions put a speed limit on how much low-deposit lending banks can do at all — currently, no more than 25% of a bank's new owner-occupier lending can go to borrowers with less than a 20% deposit. That's a system-wide cap, not a decision any single lender can wave through.

Most lenders on our panel still want 10–20% down for a standard owner-occupier loan. There are real ways around finding that much cash yourself — a government-backed scheme, a guarantor, KiwiSaver — but "no deposit" really means "no cash deposit of your own," not "no deposit at all." Somebody's equity, insurance, or savings is always doing the work a deposit usually does.

Advisers love putting "no deposit options available" in an ad. Fewer of them mention the guarantor, the insurance premium, or the income cap in the same sentence. Here's the actual list:

• The First Home Loan — 5% deposit, income caps apply, insurance premium payable.
• A guarantor loan — someone else's home equity covers the shortfall, last resort not first choice.
• KiwiSaver plus a gift — stacked together, rarely enough on their own.

The First Home Loan: 5% Deposit, Not Zero

The closest thing to a genuine low-deposit home loan in NZ is the First Home Loan. Kāinga Ora doesn't lend the money itself — a participating bank or non-bank lender does — but Kāinga Ora underwrites enough of the risk that a lender can accept 5% down instead of the usual 10–20%. I've covered the fuller mechanics in our guide to what Kāinga Ora actually does.

Income caps still apply, and Kāinga Ora reviews them from time to time, so check the current numbers before you assume you're over or under. A one-off insurance premium applies too, since the lender's carrying more risk for a smaller deposit — ask for today's rate, since it's changed before and it'll change again.

Not every lender on a panel writes First Home Loans, which is exactly the kind of detail that's easy to miss without someone checking it for you first. For the wider picture on deposit amounts generally, see our guide on home loan deposits in NZ.

A Guarantor: Someone Else's Equity Standing In for Yours

A guarantor loan is the other genuine no-cash-deposit route. A family member offers equity in their own home as extra security, and the lender treats that equity as if it were your deposit. It's a more ambitious ask than my golf handicap, using someone else's house to cover a gap yours can't — but it works, and it's how plenty of first home buyers get across the line without years of extra saving.

Here's the opinion I'll put my name to: using a guarantor's home as security should be a last resort, not the default the first lender offers. It's the fastest way to turn one missed payment into two families at risk, not one. I'd rather a client explore the First Home Loan, KiwiSaver, and a gifted deposit first, and only bring a guarantor into it once those are genuinely off the table.

If a guarantor loan is the right fit, it still needs the same discipline as any other loan — a clear exit plan for releasing the guarantor once your own equity's built up, not an open-ended arrangement nobody revisits.

KiwiSaver and Gifted Deposits: Stacking What You've Got

Most buyers who get close to a no-deposit outcome aren't relying on one option — they're stacking two or three. If you've been a KiwiSaver member for at least three years, you can generally withdraw your savings for a first home deposit. On its own it's rarely enough for a full 5–10%, so it usually sits alongside something else.

A gifted deposit from family is the other common piece. Most lenders on our panel will accept it, provided it's a genuine gift with a signed letter confirming it doesn't need to be repaid. (A loan quietly relabelled as a gift is a different conversation with the bank, and not one that ends well — lenders have seen that trick before.)

Non-bank lenders on our panel can sometimes be more flexible about how a deposit's made up — a mix of KiwiSaver, a gift, and genuine savings, rather than one lump sum sitting untouched for months. See our guide on non-bank home loan lenders in NZ for when that's the better first call.

When a Low-Deposit Loan Isn't the Right Call

A smaller deposit almost always costs more over the life of the loan — a higher interest rate, an insurance premium on a First Home Loan, or a guarantor arrangement that ties up someone else's equity for years. That's not a reason to rule it out. It's a reason to weigh it against what waiting and saving longer would actually cost you, not just what it feels like on settlement day.

I'd stop and think twice if the numbers only work with nothing left over for the unexpected — a rate rise, a job change, a repair the house needed but the pre-purchase check missed. A low deposit gets you in the door faster. It doesn't buy you any more room once you're through it.

Know your deposit and your numbers before the first call. A borrower who can say "here's my 5%, here's where the rest is coming from, here's my income" gets taken seriously faster than one who can't.

Why This Is Easier With the Right Adviser

Working out which of these options you actually qualify for — and which lender on a panel will say yes to your specific mix of KiwiSaver, gift, and income — isn't something you can look up once and trust six months later. Policies move. Income caps move. Which banks are even writing First Home Loans this month moves.

We check your numbers against all 20 banks and non-bank lenders on our panel — 7 banks, 13 non-bank — before telling you whether a First Home Loan, a guarantor loan, or a standard low-deposit loan fits best. We reply within 2 business hours, and we've settled 200+ home loans since 2017 for buyers working with exactly this range of deposit sources. See our guide on first home buyers for the wider picture, or our guide on mortgage pre-approval in NZ for what to have ready before you apply.

There's no fee for that first conversation. In the typical case, the lender pays us once your loan settles — financial advisers are required to disclose exactly how, and we do, before anything's lodged. AML Financial Services Limited is a licensed Financial Advice Provider — FSP 714331. Kundan Singh, FSP 512966. Both on the public register, worth checking for any adviser you're talking to.

Sweet as if "no deposit" sounds like the easy button. Give us a call and we'll tell you honestly which real option gets you there — not the one that ranks best on Google.