How to Secure a New Build with a 5% Deposit

Thanks to government-backed schemes and specific lending exemptions, it's possible to buy a brand-new home in Auckland with just a 5% deposit.

This blog explains how that's possible, what eligibility looks like, and why new builds offer unique advantages in a high-demand market. Whether you're early in your savings journey or already exploring developments, this guide will help you move forward with confidence.

What Is Considered a "New Build" in NZ?

Before diving into finance options, it's important to understand what qualifies as a new build in the eyes of lenders and government schemes.

A new build generally refers to a home that has received a code compliance certificate within the last six months and has never been lived in before. It is typically either a turnkey property or a house and land package built from a set plan, often off the plans, and is purchased directly from the developer or building company. New builds can include standalone houses, townhouses, and apartments. Many of them are part of larger developments and may even offer incentives like free appliances or other contributions.

You can browse a selection of options on our New Builds page featuring properties across Auckland and New Zealand.

Why New Builds Are More Accessible for Low Deposit Buyers

In New Zealand, the Reserve Bank regulates how much lending banks can do to borrowers with less than a 20% deposit. However, new builds are treated differently.

Most major lenders are allowed to approve low deposit loans (below 20%) for new builds without breaching their loan-to-value ratio (LVR) restrictions. This gives them more flexibility to approve your application, even with just a 5-10% deposit.

The government also actively supports new build purchases through the First Home Loan.

Using a First Home Loan to Buy with a 5% Deposit

The First Home Loan is a government-backed lending product that allows eligible buyers to secure a mortgage with as little as 5% deposit.

While offered by regular banks and lenders (like Westpac, SBS, Kiwibank, and others), the key difference is that your low deposit is underwritten by Kainga Ora.

To qualify, you'll need to meet certain criteria:

• Income limits: Up to $95,000 for individuals, or $150,000 for joint applicants
• Deposit: Minimum of 5% of the property's purchase price
• NZ residency or citizenship
• Good credit history and ability to service the loan

You can learn more about the First Home Loan process and what's required by reading our blog on Getting Pre-Approved for a Home Loan.

Finding the Right New Build Development

Once your finance strategy is in place, the next step is finding the right new build development. When assessing your options, consider:

• Location: Is it close to work, transport, and schools?
• Type of build: Are you looking for a standalone home or a townhouse?
• Turnkey vs House & Land: Turnkey builds may suit buyers with tight timeframes, while house & land packages offer more customisation.
• Developer reputation: Choose a builder with a track record of quality builds and timely delivery.

You can browse developments here: New Build Properties Auckland & NZ

Structuring Your Home Loan for Success

Securing your new build is just the start - the way you structure your home loan can significantly affect your long-term financial wellbeing.

In a softening interest rate market, many buyers are opting for 1- and 2-year fixed terms, which offer a good mix of stability and flexibility. Splitting your loan across multiple fixed terms can protect you from future rate rises, while still allowing part of your loan to refix sooner.

You can explore more strategies in our Loan Structure Guide, which covers fixed vs floating rates, revolving credit and offset options, and how to tailor loan splits to your goals.

Navigating the Paperwork

Key Tips for Success

While new builds can provide some benefits compared to buying existing homes, there are still some critical steps to tick off. Get a building contract reviewed by your lawyer before signing anything, understand any staged payments if buying off the plans, and check what's included as some packages don't include landscaping, fencing, or window treatments. Your mortgage adviser and solicitor will guide you through these steps, but it pays to stay informed.

Your Next Move Starts Here

Buying a new build in Auckland with a 5% deposit isn't a pipe dream - it's a very real possibility with the right guidance and preparation. By combining the First Home Loan and KiwiSaver Withdrawal, many first-time buyers are securing high-quality homes in up-and-coming suburbs, often with less stress and more confidence.