PWBreadcrumb Tools
πŸ‡³πŸ‡Ώ New Zealand guide5 min read

LVR Restrictions in New Zealand: What Home Buyers Need to Know

The Reserve Bank of New Zealand's LVR restrictions directly determine how much deposit you need to buy a home. Here's how they work and what they mean for you.

Use the calculator

Try the Deposit Savings Calculator to put these concepts into practice.

Open β†’

Key takeaways

  • βœ“Owner-occupiers typically need at least 20% deposit (80% LVR limit)
  • βœ“Investors face tighter restrictions β€” typically 35% deposit required (65% LVR)
  • βœ“Banks can lend a limited portion of new loans above these limits (the "speed limit")
  • βœ“New builds are exempt from some LVR restrictions β€” an important first home buyer pathway
  • βœ“LVR restrictions are set by the RBNZ and change periodically

How LVR restrictions work in New Zealand

The RBNZ sets limits on what proportion of a bank's new residential mortgage lending can exceed certain LVR thresholds. This is a macroprudential tool β€” not a hard ban on high-LVR lending.

As of 2024:

Owner-occupiers: Maximum 80% LVR. Banks can lend up to 20% of their new owner-occupier loans above 80% LVR. This means some owner-occupiers can still get mortgages with less than 20% deposit β€” but it's not guaranteed.

Investors: Maximum 65% LVR. Banks can lend up to 5% of new investor loans above 65% LVR. Effectively requiring 35% deposits for most NZ property investors.

Always check current rules at rbnz.govt.nz as thresholds change.

πŸ’‘ Tip: LVR exemptions exist for new builds. Buying or building a new property may allow you to qualify at higher LVR than the standard limits β€” a significant advantage for first home buyers who can't reach 20% deposit.

The 20% deposit in practice

On NZ$750,000, 20% = NZ$150,000. This is a substantial challenge for first home buyers.

First Home Loan (Kāinga Ora): Allows eligible first home buyers to qualify with as little as 5% deposit on existing homes and new builds, subject to income and price caps.

First Home Grant: NZ$3,000–NZ$10,000 (depending on KiwiSaver contribution history and property type) toward the deposit.

KiwiSaver First Home Withdrawal: First home buyers can withdraw most of their KiwiSaver balance (everything except NZ$1,000). For buyers contributing for 3+ years, this can be a significant sum.

LVR rules for investors

NZ residential property investors face a 35% deposit requirement β€” meaning NZ$227,500 on a NZ$650,000 property.

This was tightened to 40% in 2021 before being eased slightly to 35% in 2023. The RBNZ may further ease investor LVR restrictions as conditions stabilise.

For existing property owners, equity from existing properties (cross-collateralisation or a separate equity loan) can provide the required deposit without saving from income.

New builds are fully exempt from the 65% LVR investor restriction β€” investors can purchase new builds with 20% deposit. This is a key reason new build construction remains popular with NZ investors.

Frequently Asked Questions

Calculators mentioned in this guide

Deposit Savings Calculator

Calculate how long it takes to save a 20% NZ deposit.

Try calculator

Mortgage Repayment Calculator

See how deposit size changes your monthly repayment.

Try calculator

Rent vs Buy Calculator

Model whether renting while saving vs buying now is better.

Try calculator

Disclaimer: Calculations are estimates for general guidance only and do not constitute financial advice. Mortgage rates, LVR restrictions, and lending criteria vary by lender and may be subject to RBNZ requirements. Consult a registered financial adviser before making property decisions.