How much deposit do you need for an investment property in NZ?

Why do investors need 30 percent?

Because of the Reserve Bank's loan-to-value (LVR) restrictions. They do not ban low-deposit investor loans; they cap how many each bank can make. Since 1 December 2025 the cap is 10 percent of a bank's new investor lending above 70 percent LVR, up from 5 percent. With so little room, banks ration it, and the normal requirement is a 30 percent deposit.

For comparison, owner-occupiers face a looser limit: up to 25 percent of a bank's new owner-occupier lending can be above 80 percent LVR. That is why a first home can be bought with 10 or 20 percent down, and a rental usually cannot.

Is the deposit different for a new build?

Yes. Lending to build or buy a newly built home is exempt from the LVR restrictions, so a bank is not using up its limited low-deposit allowance. Each bank sets its own criteria for new builds, and the deposit asked of investors is often lower than 30 percent. Check the definition of a new build with the lender, because timing matters.

The exemption is the Reserve Bank's; what a particular bank will lend is still its own decision, based on the property, the rent and your income.

Can you use equity in your home as the deposit?

Often, yes. The deposit does not have to be cash. If you own your home with enough equity, a bank may lend against both properties, so the combined lending stays within its LVR limits. The bank looks at total lending across both properties, not just the new one.

Using equity means borrowing more, so the repayments and the debt-to-income test both apply to the whole lot.

Debt-to-income rules for investors

Since 1 July 2024, banks can make only 20 percent of new investor lending to borrowers whose total debt is more than seven times their gross income. For owner-occupiers the line is six times. Rental income counts towards income, and new builds are exempt.

The DTI and LVR limits work together: the LVR limit decides how big the deposit needs to be, and the DTI limit can cap how much you can borrow in total, however big the deposit. See the debt-to-income guide for how the ratio is calculated.

Tax rules that affect investors

These are general rules. How they apply depends on how you hold the property, so Inland Revenue or an accountant is the place to confirm your position.

• Bright-line test: for residential property sold on or after 1 July 2024, a gain is generally taxable if you sell within two years of buying. Your main home is usually excluded.
• Interest deductibility: from 1 April 2025, interest on loans for residential rental property is fully deductible again, after being phased back in from 2024.
• Ring-fencing: losses from residential rentals generally cannot be offset against salary or wages; they carry forward against future rental income.