How Much Money Do I Need To Invest? Property Deposit Requirements Explained
- Ryan Smith
- Aug 12, 2022
- 5 min read
Updated: 5 days ago
Breaking down the real numbers behind property deposit requirements and how they affect you as an investor.
One of the most common questions aspiring property investors ask is: "How much money do I actually need to get started?"
And no wonder, money is one of the biggest barriers to entry.
Understanding property deposit requirements and where you can pull those funds from is essential if you're serious about getting into the game.
The answer, of course, isn’t one-size-fits-all. Your deposit depends on whether you’re a first home buyer or an investor, whether you’re buying a new build or an existing property, and whether you're using cash, equity, KiwiSaver, or even the Bank of Mum and Dad.
Let’s unpack it all.
Deposit Basics: What Counts as a Property Deposit?
A deposit is simply the upfront contribution you make towards the purchase of a property, before the bank stumps up the rest.
But it doesn’t always have to be a wad of cash sitting in your savings account.
Here are common deposit sources:
Cash savings
KiwiSaver (for first-home buyers)
Gifted money (commonly from family)
Equity in existing property
Equity is a key resource for existing homeowners. It’s the difference between your property's value and the amount you still owe on the mortgage.
If your property’s gone up in value or you've paid down some debt, you may have "useable equity" to leverage for future investments.
First Home Buyers: How Much Do You Need?
If you're buying your first home, the lending landscape is actually in your favour, at least on paper.
Minimum deposit: As little as 5% in some cases
More common deposit: 10%
Yes, banks can lend up to 95%, but they rarely do unless you're earning well above average and have immaculate credit.
For most people, especially those on more modest incomes, banks are more comfortable at 90% lending, meaning you’ll need a 10% deposit.
For example:
On a $700,000 property, a 10% deposit = $70,000
Many first-home buyers tap into their KiwiSaver to help bridge this deposit gap. If you're lucky enough to have family that is willing to help, add a gift from them, and you might just be able to make that first step sooner than expected.
Property Investors: The Rules Are Stricter
If you’re buying a property for investment purposes, the deposit rules are different, and they change based on whether you’re buying a new build or an existing property.
New Builds: 20% Deposit
New builds come with favourable treatment under current LVR (Loan-to-Value Ratio) rules:
Minimum deposit required: 20%
How it works: 20% of the purchase price is secured against your own home (using equity), and 80% against the new property
This is considered 100% lending, since technically you’re borrowing all the money, just split across two securities
It must be a true new build, purchased directly from the developer, with you as the first owner.
Existing Properties: 30% Deposit
This is where things get tighter:
Minimum deposit required: 30%
You’re tying up significantly more equity, which can slow down your ability to grow your portfolio
This 30% requirement is designed to dampen investor activity in the existing market and free up housing stock for owner-occupiers.
Real Example: New Build vs Existing Property
Let’s say you’ve found two properties priced at $650,000:
Investor A buys a new build
Deposit needed: $130,000 (20%)
Investor B buys an existing property
Deposit needed: $195,000 (30%)
That’s a $65,000 difference.
That extra equity that you used for your deposit in the existing property is wasted, and you will slow down your investment progress.
This is why many savvy investors favour new builds in the current environment, not because they're inherently better properties, but because the rules make them more scalable.
But What If You Don’t Have Enough?
If your current deposit falls short, don’t stress; there are still options to consider:
Grow your equity: Focus on increasing the value of your current home or paying down your mortgage faster
Buy with a partner: Teaming up with a family member or friend can give you the financial firepower to get on the ladder
Consider smaller markets: Regional areas or smaller cities often have lower entry prices and lower deposit requirements in dollar terms
Use non-bank lenders: Some non-bank lenders are more flexible with deposit rules, though often at a higher interest rate
Final Thoughts: Start With Strategy, Not Just Cash
Having the money for a deposit is only half the battle.
Having a strategy to grow your portfolio, whether through new builds, equity recycling, or capital growth, is what sets successful investors apart.
Start by working out your deposit options and how far they can take you. Then build your investing plan around those numbers, not the other way around.
If you want help mapping out your deposit, your equity, and your strategy, reach out. We do this every day for clients at all stages of the journey.
How Can We Help You?
We help Kiwis build wealth through property investment. Our advisors will take the time to understand your individual needs and recommend suitable investment properties to help you build wealth and set up your retirement.
What Does This Look Like?
We use a 3-step process:
We start with a Discovery Meeting where we learn about you, your goals, etc., and you learn more about us.
This is followed by a Strategy Meeting where we model your retirement plan, understand key investment concepts, and briefly touch on some investment choices.
Finally, an Asset Selection Meeting where we discuss investment options in more detail and make any recommended adjustments based on what we now know about you.
Who Are We Right For?
We help people make smart investment choices and set up their futures. From first-time investors to experienced investors, we can cater to a wide range of people and help set up their futures through research-based property investment.
How Much Does It Cost?
Our advice is free to you! If you choose to invest, we’re paid by the property developer. This developer-paid model allows us to provide no-obligation property investment advice in New Zealand, without charging clients directly.
What Do We Do, And What Don't We Do?
What We Do
We offer end-to-end New Zealand property investment advice, helping Kiwi investors grow wealth through smart, data-led decisions. Our focus is on quality new builds in strong locations, tailored to your goals, guided by a team that knows the NZ market inside out.What We Don’t Do
We don’t do KiwiSaver, shares, cryptocurrency, or broad financial planning. Thrive is not a generalist firm. We specialise in property investment in New Zealand because that’s where we deliver the most value. By staying focused, we cut through the noise and help our clients make confident, well-informed property investment decisions.
How Do I Start?
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