How much deposit do I need?

Right, so you’ve decided, “I want to buy a house!”

Congratulations! Now the homework starts. There is a bunch of information to gather and criteria to meet to get your first home loan approved.

A bit of planning and getting your ducks in a row (including finding a stellar adviser to help you along the way) could make the seemingly impossible, possible!

One of the key criteria is your deposit. Ask yourself, “where do I get it from and how much do I need?” Your deposit doesn’t need to be cold, hard cash under your mattress! It can be made up of a combination of savings, KiwiSaver, inheritance money, or gifted funds from family. You might decide to sell your boat or spare car to add to your deposit kitty as well. I know, I know! But ask yourself, “what’s my priority?”

Everyone’s situation is unique and the deposit you need could also depend on the type of property you want to buy, so chat with your adviser. For now, here is a guide as to how much you need for a standard home you intend to live in yourself:

• A 20% deposit is the ideal. This gets you the best interest rates and likely a bigger choice in lenders to choose from

• A 10% deposit is acceptable for many lenders. The criteria are a little stricter and you may have extra costs involved (more on this later) but this is certainly doable and very common for first home buyers

• A 5% deposit is an option in a small number of cases, where you meet the First Home package on offer with select lenders

Sorting your deposit is only one part of the puzzle, so be sure to speak with your adviser to make sure you have all the pieces covered.