Twenty percent remains an important benchmark in New Zealand mortgage lending, but the latest Reserve Bank data shows it's far from the whole story.

In August 2026, banks committed $1.475 billion of new lending to first-home buyers. Of that, $815 million was lending above 80% loan-to-value ratio (LVR), meaning the borrowers had less than 20% equity in the property.

That's approximately 55% of all first-home-buyer lending by value during the month.

So if you have a 10% or 15% deposit, the latest lending data provides a useful reality check: buyers with deposits below 20% are getting mortgages in meaningful numbers.

That doesn't mean every low-deposit application will be approved. Your income, existing debt, expenses, credit position and the property itself still matter.

If you're unsure whether your current deposit is enough, contact our team for a personalised first-home-buyer assessment. We can look at your deposit alongside your actual income, debts and borrowing position rather than relying on a headline percentage.

What does the latest first-home-buyer data show?

The RBNZ's August lending data, released on 24 September 2026, shows:

The trend is also interesting.

In August 2025, $735 million of $1.470 billion in first-home-buyer lending was above 80% LVR, approximately 50%.

In August 2024, the figure was $546 million out of $1.270 billion, around 43%.

That doesn't tell us the precise deposit each borrower had. Someone at 81% LVR and someone at 90% LVR are both included in the same "above 80%" category.

But it does tell us something important:

A deposit below 20% is now a mainstream feature of first-home-buyer lending rather than an unusual exception.

First-home buyer deposit checklist

1. Understand what 80% LVR actually means

LVR compares the mortgage with the value of the property securing it.

For example:

Anything above 80% LVR represents less than 20% equity.

That's why a 10% deposit is commonly described as a low-equity or high-LVR loan.

It's not the same as saying the loan is prohibited. For a full breakdown of how these rules work and what changed at the end of 2025, see our guide to LVR rules, deposits and low-equity lending.

2. Don't confuse the RBNZ's 25% rule with a 20% minimum deposit

This is probably the most common misunderstanding around LVR rules.

Current Reserve Bank settings allow banks to have up to 25% of relevant new owner-occupier lending above 80% LVR. Those settings were retained at the RBNZ's August 2026 review.

That's a speed limit on banks' lending portfolios, not a rule saying every fourth buyer can have a small deposit or that every individual borrower must provide 20%.

It also explains why the fact that around 55% of August first-home-buyer lending was above 80% LVR doesn't contradict the 25% rule.

First-home buyers are only one part of the wider owner-occupier market, and the RBNZ notes that its C31 borrower-type statistics are not the same measure used to determine banks' formal LVR compliance.

In practice, banks also set their own lending policies and can be more conservative than the RBNZ permits.

3. A 10% deposit can work, but the rest of your application matters more

If you're buying a $700,000 home with $70,000, you're asking the lender for a 90% LVR mortgage.

That sits within high-LVR lending.

Whether a bank is comfortable with it can depend on factors including:

• Stable and verifiable income

• Employment history

• Household expenses

• Credit cards and personal debt

• Student or other loan commitments where relevant to servicing

• Credit history

• The type and condition of the property

• Your ability to keep a financial buffer after settlement

Low-equity lending can also be priced differently from lending at or below 80% LVR.

So rather than asking only "Can I get a mortgage with 10%?", a better question is:

"How strong is the whole application alongside my 10% deposit?"

Our First Home Buyer's Guide to getting a mortgage in New Zealand walks through exactly what lenders look at when assessing your full application.

4. Deposit isn't the same thing as borrowing power

You can have enough deposit and still be unable to borrow the amount you need.

This is where Debt-to-Income rules become relevant.

For owner-occupiers, lending above a DTI of 6 is treated as high-DTI lending, with banks allowed to make up to 20% of applicable owner-occupier lending above that threshold.

A DTI of six broadly means total relevant debt is six times the gross income recognised by the lender.

For example, if a household has recognised gross income of $150,000 and total relevant debt of $750,000:

$750,000 ÷ $150,000 = DTI 5

Increase the debt to $975,000 and the ratio becomes:

$975,000 ÷ $150,000 = DTI 6.5

But, like the LVR rule, six is not an absolute borrowing ceiling for every individual applicant. For a plain-English explanation of how both LVR and DTI rules interact, see our guide to what deposit you really need in 2026.

5. The latest DTI data is actually encouraging for first-home buyers

August's figures provide an interesting comparison with the LVR data.

Of approximately $1.475 billion in first-home-buyer commitments:

• $105 million sat between DTI 6 and 7

• $22 million was above DTI 7

That means roughly $127 million, around 9% of first-home-buyer lending, was above DTI 6.

Compare that with approximately 55% being above 80% LVR.

You shouldn't interpret that as proof that deposits are the only barrier to buying. But it does illustrate that low-equity borrowing is considerably more common among current first-home-buyer lending than very high DTI borrowing.

For many buyers, the practical question may therefore be less about reaching exactly 20% and more about whether their income supports the mortgage required with the deposit they already have.

6. A larger deposit still has real advantages

None of this means a 20% deposit no longer matters.

More equity can potentially give you:

• Access to a wider range of lender options

• Less exposure to low-equity premiums or margins

• A smaller mortgage

• Lower repayments

• More protection if property values decline

• More borrowing flexibility

For example, on a $700,000 property:

• 10% deposit = $630,000 mortgage

• 20% deposit = $560,000 mortgage

That's $70,000 less debt.

So the decision to buy at 10% versus waiting for 20% isn't simply about whether a bank will say yes.

You also need to weigh up the additional debt, repayments and how long it would take you to save the extra deposit. Our mortgage calculators can help you compare repayments at different deposit levels and loan amounts.

7. Don't forget KiwiSaver when calculating your actual deposit

For eligible first-home buyers, KiwiSaver can form a significant part of the deposit.

Generally, eligible members who have been in KiwiSaver for at least three years can withdraw most of their savings for a qualifying first-home purchase, while leaving at least $1,000 in the account.

For couples, each eligible buyer may be able to make their own withdrawal.

That means somebody thinking they have "only $30,000 saved" may have a materially larger available deposit once eligible KiwiSaver balances are included. See our complete guide to using KiwiSaver to buy your first home for full eligibility details and how to make a withdrawal.

8. Some eligible buyers can purchase with as little as 5%

The standard bank LVR framework isn't the only pathway.

Kāinga Ora's First Home Loan allows eligible borrowers to purchase with a deposit from 5%, through participating lenders.

These loans are also exempt from the RBNZ's LVR restrictions.

Eligibility requirements apply, including income criteria and participating lenders' normal affordability and credit assessments.

So a 5% deposit isn't available to every buyer, but it's a genuine pathway for some households that can service a mortgage but have struggled to accumulate a larger deposit.

9. Returning Kiwis should check how overseas income and savings will be treated

If you're returning from Australia, your deposit may not be the complicated part.

You may already have substantial savings, but lenders can take different approaches to:

• Australian employment income

• A new NZ employment contract

• Existing Australian liabilities

• Foreign bank statements

• AUD savings being transferred to New Zealand

• Evidence of the source of deposit funds

Currency movements also mean the NZ-dollar value of an Australian deposit can move before settlement.

For returning Kiwis, it can therefore be worthwhile establishing your likely borrowing power before transferring all your savings or committing to a property. Our guide to returning to New Zealand and what it means for buying a home in 2026 covers the key considerations in detail.

What the broader August lending data tells us

Across all borrower types, banks made $7.188 billion of new residential mortgage commitments in August, down from $7.853 billion in July.

Of that total, $1.2 billion was above 80% LVR.

First-home buyers accounted for $815 million of that high-LVR lending, roughly two-thirds of all mortgage commitments above 80% LVR during the month.

That makes first-home buyers the dominant group using this part of the mortgage market.

It's also a reminder why looking only at the headline "20% deposit" benchmark can give aspiring buyers an incomplete picture of what's actually happening.

What's Not in the Headlines

Low-deposit lending to first-home buyers has increased as a share of their borrowing.

Around 43% of first-home-buyer lending was above 80% LVR in August 2024. By August 2025 it was around 50%, and in August 2026 approximately 55%.

That doesn't mean lenders have abandoned deposit standards.

Banks still have their own credit criteria and must manage their overall high-LVR lending within the Reserve Bank framework.

DTI is currently much less prominent than high LVR among first-home-buyer lending. Only about 9% of August FHB lending was above a DTI of six, compared with around 55% above 80% LVR.

The RBNZ itself currently views housing-related financial-stability risks as contained.

When it reviewed LVR settings in August, the Financial Policy Committee noted broadly flat national house prices, modest mortgage lending growth and a manageable share of higher-risk lending, and chose to leave the current rules unchanged.

So how much deposit do you really need?

For many owner-occupiers, 20% remains the simplest benchmark.

But the latest lending data makes it clear that it's not a universal minimum.

If you have:

20% or more:
You're generally outside the high-LVR category and may have access to a broader range of lending options.

Around 10–15%:
Don't automatically assume you need to keep saving. Significant first-home-buyer lending is currently occurring at LVRs above 80%.

Around 5–10%:
Options become more specialised, but some conventional high-LVR lending and qualifying First Home Loans may be worth investigating.

The key is not to look at the deposit in isolation.

A lender will ultimately assess the combination of:

Deposit + income + existing debt + expenses + credit position + property + repayment capacity.

The takeaway

The freshest Reserve Bank data challenges one of the most persistent myths in the first-home-buyer market:

You don't automatically need a 20% deposit to buy your first home in New Zealand.

In August, first-home buyers received $1.475 billion of new mortgage lending, with $815 million, approximately 55%, at LVRs above 80%.

At the same time, only about 9% of first-home-buyer lending was above a DTI of six.

That doesn't mean a 10% deposit guarantees approval. Nor does it mean buying sooner is always preferable to saving a larger deposit.

It does mean the useful question isn't simply:

"Have I reached 20% yet?"

It is:

"With the deposit I have today, what can I realistically and comfortably finance?"

If you're saving towards your first home, or returning to New Zealand and trying to work out whether your current savings are enough, contact our team for a personalised mortgage consultation. We can assess your deposit alongside your income, debts and likely lender options and help you understand whether buying now is realistic or whether there's value in building a larger deposit first.

This article provides general information only and does not constitute personalised financial advice. Lender criteria, LVR and DTI settings and government programme eligibility can change.

Primary Sources

Reserve Bank of New Zealand — New residential mortgage lending by borrower type (C31), August 2026, released 24 September 2026
RBNZ C31 borrower-type lending data

Reserve Bank of New Zealand — New residential mortgage lending by LVR (C30), August 2026
RBNZ C30 LVR lending data

Reserve Bank of New Zealand — Residential mortgage lending by DTI (C40), August 2026
RBNZ C40 DTI lending data

Reserve Bank of New Zealand — Current LVR restrictions
RBNZ LVR restrictions

Reserve Bank of New Zealand — August 2026 review of LVR settings
RBNZ August LVR decision

Kāinga Ora — First Home Loan
Kāinga Ora First Home Loan information