Can I use KiwiSaver for an investment property deposit?

No. KiwiSaver first home withdrawal is only available for owner-occupied properties. You cannot use KiwiSaver funds for investment property purchases.

Do all banks require 30% deposit for investment properties?

Most major banks follow the 30% guideline due to Reserve Bank LVR restrictions (eased from 35% in November 2024). Some may have slightly different policies, especially for existing customers with strong positions. Non-bank lenders may offer different terms but often at higher interest rates.

Can I use a family member as a guarantor to reduce my deposit?

While family guarantees are common for first home buyers, they are less commonly used for investment properties. Some lenders may consider it, but LVR restrictions still apply to the overall lending position.

Are LVR requirements likely to change?

The Reserve Bank reviews LVR settings periodically based on financial stability concerns. Requirements have changed several times in the past and may change again. It is worth staying informed about potential changes.

How Much Deposit for an Investment Property in NZ?

One of the first questions aspiring property investors ask is how much they need to save before they can buy. The answer depends on several factors, including current LVR restrictions, the type of property you are buying, and how strong your financial position is.

Understanding LVR Restrictions

Loan-to-Value Ratio (LVR) restrictions are rules set by the Reserve Bank of New Zealand that limit how much banks can lend relative to a property's value. These rules are stricter for investment properties than for owner-occupied homes.

Current LVR Requirements (as at 2025):

Investment properties: Maximum 70% LVR (meaning you need at least 30% deposit)
New build investment properties: May qualify for up to 80% LVR (20% deposit)
Owner-occupied homes: Up to 80% LVR for most borrowers

Note: The RBNZ eased investor LVR restrictions in November 2024, reducing the deposit requirement from 35% to 30%. Banks have limited capacity to lend above these thresholds, so exceptions are rare for investors.

What This Means in Dollar Terms

To understand how much you need, let us look at some examples based on different property prices:

Deposit Examples (30% requirement):

$500,000 property: $150,000 deposit needed
$600,000 property: $180,000 deposit needed
$700,000 property: $210,000 deposit needed
$800,000 property: $240,000 deposit needed
$1,000,000 property: $300,000 deposit needed

These numbers can seem daunting, but remember that your deposit does not all need to come from cash savings. Equity in an existing property can contribute to your deposit.

Additional Costs to Budget For

Your deposit is not the only upfront cost. You also need to budget for:

Legal fees: $1,500 to $3,000 for conveyancing
Building inspection: $400 to $800
LIM report: $200 to $400
Valuation (if required): $500 to $1,000
Mortgage fees: Varies by lender
Moving and setup costs: If you need to prepare the property for tenants

As a rough guide, budget an additional $5,000 to $10,000 on top of your deposit for these costs.

Using Equity as Your Deposit

If you already own a property with equity, you may not need to save a cash deposit at all. The equity in your current home can act as security for your investment property purchase.

Example: Using Home Equity

Your home value: $900,000

Your mortgage: $400,000

Your equity: $500,000

Usable equity (at 80% LVR on home): $720,000 - $400,000 = $320,000

This $320,000 could fund a significant investment property purchase.

New Build Exemptions

New build properties currently receive preferential LVR treatment. This means you may be able to purchase a new build investment property with only a 20% deposit instead of 30%.

To qualify as a new build for LVR purposes, the property generally needs to be a new dwelling that has received its code compliance certificate within the last 12 months. Check the specific requirements with your lender, as definitions can vary.

Strategies to Build Your Deposit Faster

1. Pay Down Your Home Loan

If you own a home, every dollar you pay off your mortgage builds equity that can be used for investment property deposits.

2. Increase Your Income

Side hustles, overtime, or career advancement can accelerate your savings rate significantly.

3. Reduce Expenses Temporarily

A focused period of reduced spending can fast-track your deposit savings, even if it is not sustainable long term.

4. Consider Lower-Priced Markets

Regional areas often have lower property prices, meaning smaller deposits required. A $400,000 property needs only $120,000 at 30% LVR.

5. Partner with Someone

Pooling resources with a partner, family member, or friend can get you into the market sooner.

When Banks May Offer Exceptions

Banks have limited capacity to lend above standard LVR limits. They may consider exceptions for borrowers who have:

Very strong income and serviceability
Significant other assets
An excellent credit history
A long-standing banking relationship

However, these exceptions are rare and not something to count on. Plan based on standard requirements.

Next Steps

Understanding deposit requirements is just the first step. Here is what to do next:

Calculate your current equity or savings position
Determine your target property price range based on your deposit
Get pre-approval from a lender to confirm your borrowing capacity
Start researching areas that fit your budget and investment criteria

With clear targets and a plan, you can work systematically toward your first investment property purchase.