Step 01 · Savings
Before you start looking at properties seriously, you need a clear picture of four things: your deposit, purchase costs, borrowing limit, and emergency buffer. This step helps you work out a realistic savings target.
Before you set a savings target, look at what properties are actually selling for in your local market. One helpful reference is the median sale price of homes in your area, which can help you set a realistic savings goal, but it isn’t the exact price you should expect to pay for every property.
Explore the Market
With the median sale price in mind, the next step is to explore what properties are actually selling for in the areas and property types you’re considering. Focus on recent sale prices — not just asking prices — for homes that match your criteria in your target suburbs.
realestate.co.nz
The site provides up-to-date market performance data across New Zealand, so your research can give you a realistic price range and help you set a clear savings target in the sections below.
What You Need to Save For
While buyers often focus on the deposit, include five key categories in your savings plan to better achieve your financial goals:
- Deposit | the percentage of the purchase price you pay upfront.
- Purchase costs | legal fees, building inspections, and other one-off expenses.
- Lending limits | banks have rules about how much they will lend relative to the property value, which affects how large a deposit you need.
- Emergency buffer | money set aside for unexpected costs after you move in.
- Moving costs | money set aside for cleaning, a trailer or handyman, and domestic appliances.
Deposit
To understand what you need to save, start with the Median Sale Price of the suburb you are targeting. You can find this on property websites.
See also:
Step 03: Where do you want to live?
How much deposit do I need to buy a home in NZ?
The minimum deposit in New Zealand is 5% if you qualify for the First Home Loan government programme, or 20% for a standard loan.
Other Buying Costs
On top of your deposit, budget for the following costs:
- Legal/conveyancing fees $1,500–$2,500.
- Building and LIM report allow $800–$1,500.
- Loan application and valuation fees vary by lender, often $0–$500.
- Other exceptions to consider Moisture report, Contamination.
Emergency Buffer
Owning a home comes with costs renting doesn’t. Be prepared for maintenance, appliances, rates, and insurance costs.
Aim to keep 1 to 3 months of expenses in reserve after settlement. This buffer protects you from taking on extra debt the moment something goes wrong.
Scenario 1: Qualifying for the First Home Loan
If you qualify for the government First Home Loan programme, your minimum required deposit drops to 5%. Here is how that breaks down for a home with a Registered Valuation (RV) of $770,000:
Home RV
$770,000
5% Deposit
$38,500
Lender Fee
~2%
Plus: buying costs
+ emergency buffer
For a $770,000 home, a 5% deposit is $38,500.
Also, allow roughly $3,000–$5,000 for buying costs, and set aside your emergency buffer separately. Your total savings target before purchase is closer to
$44,000–$47,000
Scenario 2: Standard Loan
For a Standard Loan, banks prefer borrowers to have about 20%. Here is how that breaks down for a home with a Registered Valuation (RV) of $770,000.
Most banks have a calculator if you want to explore different scenarios.
Home RV
$770,000
20% Deposit
$154,000
Lender Fee
~0–0.5%
Plus: buying costs
+ emergency buffer
For a $770,000 home, a 20% deposit is $154,000.
Also, allow roughly $3,000–$5,000 for buying costs and set aside your emergency buffer separately. Your total savings target before purchase is closer to
$161,000–$163,000
Your Next Step
Ready to check your borrowing power?
Once you have a realistic savings target, the next step is to determine how much you may be able to borrow.