How Much Deposit Do Banks Require For An Existing Versus A New Build?

Key Market Rules and Blind Spots

• The New Build Exemption: To boost the national housing supply, the RBNZ exempts turnkey packages, building contracts, and buying off-the-plans from standard macroprudential rules. This makes it significantly easier for investors to secure leverage using a 20% deposit instead of 30%.
• LVR Speed Limits: For existing homes, banks operate under strict portfolio “speed limits”. Banks are permitted to allocate up to 25% of their owner-occupier lending to low-deposit buyers (under 20% deposit) and up to 10% of investor lending to those with under a 30% deposit. Because these slots are capped, getting a low-deposit approval on an existing home is highly competitive.
• First Home Loan Scheme: First-time buyers looking at either existing or new builds can access a 5% deposit pathway through government-backed Kāinga Ora First Home Loans, provided they meet specific regional income caps and criteria.
• DTI Caps and Stress Testing: While new builds bypass standard LVR speed limits, you must still pass strict bank debt-to-income (DTI) caps (generally limited to 6x income for owner-occupiers and 7x for investors) and serviceability stress testing, which lenders calculate using interest rates much higher than advertised mortgage rates.