LVR Rules Explained

If you're buying a home to live in, you generally need a deposit of at least 20% of the purchase price (80% LVR). Investors need at least 35% (65% LVR). These limits are set by the Reserve Bank of New Zealand (RBNZ) and apply to all banks and non-bank lenders. There are exceptions for first home buyers and new builds, and banks have limited room to lend outside the standard limits.

What are LVR restrictions?

Loan-to-Value Ratio (LVR) measures your mortgage as a percentage of the property value. If you borrow $520,000 to buy a $650,000 home, your LVR is 80%. The RBNZ sets LVR restrictions as a macro-prudential tool to maintain financial stability by limiting the share of high-LVR lending banks can do (RBNZ).

In plain terms, LVR restrictions control the minimum deposit you need when buying property in New Zealand.

Current LVR limits (RBNZ, March 2026)

Borrower type	Maximum LVR	Minimum deposit	Notes
Owner-occupiers (standard)	80%	20%	Most buyers fall here
First home buyers (First Home Loan)	95%	5%	Via Kainga Ora scheme with participating lenders
New builds (owner-occupier)	90%	10%	Purpose-built new dwelling
Investors	65%	35%	Investment/rental properties

These limits have been in effect since November 2021 for the investor threshold and as part of the RBNZ's ongoing macro-prudential framework for owner-occupiers (RBNZ).

What this means for your deposit

Here's how much deposit you'd need at each LVR threshold across a range of house prices.

Owner-occupier deposit requirements

Purchase price	20% deposit (80% LVR standard)	10% deposit (90% LVR new build)	5% deposit (95% LVR First Home Loan)
$500,000	$100,000	$50,000	$25,000
$600,000	$120,000	$60,000	$30,000
$700,000	$140,000	$70,000	$35,000
$800,000	$160,000	$80,000	$40,000
$900,000	$180,000	$90,000	$45,000
$1,000,000	$200,000	$100,000	$50,000

Investor deposit requirements

Purchase price	35% deposit (65% LVR)
$500,000	$175,000
$600,000	$210,000
$700,000	$245,000
$800,000	$280,000
$900,000	$315,000
$1,000,000	$350,000

At a 35% deposit requirement, an investor buying a $700,000 rental property needs $245,000 in cash or equity. That's significantly more than the $140,000 an owner-occupier needs for the same property.

Speed limits: what banks can lend outside the rules

LVR restrictions aren't an absolute wall. The RBNZ allows banks to make a limited percentage of new lending above the standard LVR limits. These are called "speed limits" (RBNZ).

Borrower type	Speed limit	What this means
Owner-occupiers	Up to 15% of new lending can be above 80% LVR	Banks can approve some 85%, 90%, or even 95% LVR loans without using the First Home Loan scheme
Investors	Up to 5% of new lending can be above 65% LVR	Very limited room for investors to borrow above the threshold

This is why some buyers with deposits of 10% to 15% can still get a mortgage without going through the Kainga Ora First Home Loan. Banks have limited capacity for these loans, so they're selective. Strong income, stable employment, and a clean credit history all increase your chances. Each bank manages its speed limit allocation internally, so one bank may have room when another doesn't (RBNZ).

If your deposit is between 10% and 20%, expect to pay a low-equity margin (also called a low-equity premium) on top of the standard interest rate. This typically adds 0.25% to 1.00% to your rate, depending on your exact LVR. The closer you get to 80% LVR, the smaller the margin.

First home buyer exemptions

First home buyers have two main pathways to get a mortgage with less than a 20% deposit.

First Home Loan (Kainga Ora)

The First Home Loan allows eligible buyers to purchase with as little as a 5% deposit (95% LVR). It's available through participating lenders including Kiwibank, Westpac, and BNZ. These loans sit outside the bank's speed limit allocation because they're underwritten by a government guarantee (Kainga Ora).

Eligibility requirements:

• Income cap: $95,000 (single) or $150,000 (combined) over the past 12 months
• Regional house price caps apply (varies by area)
• Must be purchasing your primary residence
• Must be a first home buyer (or qualifying previous homeowner assessed by Kainga Ora)

First Home Grant

The First Home Grant provides up to $5,000 per eligible buyer for existing homes or $10,000 for new builds ($1,000 per year of KiwiSaver membership). This doesn't change the LVR rules, but it helps you reach your deposit target faster (Kainga Ora).

New build exemptions

Lending for new builds (brand new, never previously occupied dwellings) has a more favourable LVR limit of 90% for owner-occupiers, meaning only a 10% deposit is required. This exemption exists because the RBNZ wants to encourage housing supply. The loan sits outside the bank's speed limit allocation for existing properties (RBNZ).

New build exemptions apply to:

• House and land packages from a developer
• Purchasing a property off the plans before construction is complete
• Building on your own land where the property has not been previously occupied

The exemption does not apply to significantly renovated existing homes. The property must be a new dwelling.

Low-equity fees and margins

If your LVR is above 80%, banks charge extra to compensate for the higher risk. This comes in two forms.

Low-equity margin (ongoing): An interest rate premium added to your mortgage rate for as long as your LVR stays above 80%. Typical margins:

LVR	Typical margin above standard rate
80.01% to 85%	0.25%
85.01% to 90%	0.50% to 0.75%
90.01% to 95%	0.75% to 1.00%

Low-equity fee (one-off): Some lenders charge a one-off fee (or lender's mortgage insurance premium) instead of, or in addition to, the ongoing margin. This can range from $2,000 to $15,000+ depending on the loan amount and LVR.

On a $600,000 mortgage at 90% LVR, a 0.50% low-equity margin adds about $3,000 per year in extra interest. Once your LVR drops below 80% (through repayments or property value increases), you can ask your lender to remove the margin.

How LVR has changed over time

The RBNZ has adjusted LVR restrictions several times since first introducing them in 2013 (RBNZ).

Date	Change
October 2013	LVR restrictions introduced. Banks limited to 10% of new lending above 80% LVR
November 2015	Auckland investor limit introduced at 70% LVR (30% deposit)
October 2016	National investor limit set at 60% LVR (40% deposit)
January 2018	Owner-occupier speed limit loosened to 15%. Investor limit eased to 65% LVR
May 2020	LVR restrictions temporarily removed (COVID-19 response)
March 2021	LVR restrictions reinstated
November 2021	Current settings: 80% LVR owner-occupier, 65% LVR investor

The RBNZ reviews these settings regularly. Changes are not tied to OCR decisions. They're based on financial stability assessments, housing market conditions, and lending trends (RBNZ).

LVR and DTI: how the two restrictions work together

Since 1 July 2024, the RBNZ also applies debt-to-income (DTI) restrictions alongside LVR rules. DTI limits cap how much you can borrow relative to your income: 6x annual income for owner-occupiers and 7x for investors, with a 20% speed limit for lending above these thresholds (RBNZ).

You need to meet both the LVR and DTI requirements to get your mortgage approved. Having a 20% deposit doesn't help if your total debt would exceed 6x your income, and having a strong income doesn't matter if you can't meet the deposit threshold.

How the two interact: a worked example

Buyer: Single income of $100,000, purchasing a $700,000 home with a $140,000 deposit (20%).

• LVR check: 80% LVR. Passes the standard threshold.
• DTI check: $560,000 mortgage / $100,000 income = 5.6x DTI. Passes the 6x limit.

Now consider the same buyer trying to purchase an $800,000 home with a $160,000 deposit (also 20%).

• LVR check: 80% LVR. Passes.
• DTI check: $640,000 mortgage / $100,000 income = 6.4x DTI. Fails the 6x limit.

The second purchase passes LVR but fails DTI. The buyer would need either a higher income or a larger deposit to bring the loan amount down.

Tips for meeting LVR requirements

Build your deposit faster:

• Use your KiwiSaver first home withdrawal (available after 3 years of membership, up to your full balance minus $1,000) (IRD)
• Apply for the First Home Grant ($5,000 to $10,000 per eligible buyer) (Kainga Ora)
• Family gifts can count towards your deposit (banks require a "gifting declaration" confirming the gift is not a loan)

Consider a new build: The 10% deposit threshold (90% LVR) for new builds is significantly more achievable than 20%. House and land packages and off-the-plan purchases both qualify.

Check your existing equity: If you already own a home and want to buy another property, the equity in your current home counts towards LVR calculations on the new purchase. This is how many people move from their first home to their second without needing a fresh 20% cash deposit.

Improve your LVR over time: Once you own a home, your LVR decreases as you repay your mortgage and as property values increase. If you bought at 90% LVR, reaching 80% through a combination of repayments and modest price growth typically takes 3 to 5 years. At that point, your low-equity margin comes off.

Common questions

What does LVR mean in New Zealand?

LVR stands for Loan-to-Value Ratio. It's your mortgage amount as a percentage of the property's value. A $480,000 mortgage on a $600,000 property is 80% LVR. The RBNZ sets LVR restrictions that limit how much banks can lend at high LVRs. Most owner-occupiers need at least a 20% deposit (80% LVR), while investors need 35% (65% LVR) (RBNZ).

What is the minimum deposit for a house in NZ?

For most owner-occupiers, the minimum deposit is 20% of the purchase price ($140,000 on a $700,000 home). First home buyers can access 5% deposits through the Kainga Ora First Home Loan, and new build buyers can purchase with a 10% deposit. Investors need at least 35% (Kainga Ora, RBNZ).

Can I get a mortgage with less than 20% deposit?

Yes, but your options are limited. Banks can approve a small number of loans above 80% LVR under the speed limit (up to 15% of their new lending). First home buyers can access 95% LVR through the First Home Loan scheme. New build purchases qualify for 90% LVR. If your deposit is between 10% and 20%, expect to pay a low-equity margin of 0.25% to 1.00% on top of the standard interest rate (RBNZ).

What LVR do I need for an investment property?

Investors need a maximum LVR of 65%, meaning a minimum deposit of 35%. On a $600,000 investment property, that's $210,000. Banks can make up to 5% of their new lending above this threshold, but this allocation is tight. If you're buying your first investment property, expect stricter scrutiny of your income, expenses, and overall debt position (RBNZ).

Do LVR rules apply to new builds?

Yes, but the limits are more favourable. Owner-occupiers buying a new build can borrow up to 90% LVR (10% deposit). This exemption exists because the RBNZ wants to encourage new housing supply. The standard 65% LVR applies to investors buying new builds unless the bank uses its speed limit allocation (RBNZ).

What is the speed limit for LVR in NZ?

The speed limit is the percentage of a bank's new lending that can exceed the standard LVR thresholds. For owner-occupiers, banks can make up to 15% of new loans above 80% LVR. For investors, only 5% of new loans can be above 65% LVR. Each bank manages its allocation internally, so availability varies (RBNZ).

How do I get rid of my low-equity margin?

Once your LVR drops below 80%, you can ask your lender to remove the low-equity margin. Your LVR decreases as you make repayments and as property values increase. Most lenders require a new valuation (at your cost, typically $600 to $1,000) to confirm the property value before removing the margin. Some lenders may use an automated valuation at no cost.

When will the RBNZ change LVR rules?

The RBNZ reviews LVR settings as part of its macro-prudential policy framework. Changes are not tied to OCR decisions. They're based on financial stability assessments, housing market conditions, and lending trends. The RBNZ publishes its reasoning when changes are made. As at March 2026, the current settings (80% owner-occupier, 65% investor) have been in place since November 2021 (RBNZ).

How do LVR and DTI rules work together?

Since July 2024, the RBNZ applies both LVR and DTI restrictions. You must meet both limits: a sufficient deposit for LVR, and a loan amount within 6x your income for owner-occupiers (7x for investors) for DTI. Having a large deposit doesn't help if your borrowing exceeds the DTI cap, and a high income doesn't matter if you can't meet the minimum deposit (RBNZ).

What to do next

• First home buyer guide: Full guide to buying your first home, including grants and KiwiSaver withdrawals
• How much can I borrow: Understand how banks calculate your borrowing power
• NZ mortgage rates: Compare current rates across all major banks
• PAYE calculator: Check your take-home pay to understand your deposit saving capacity
• Mortgage calculator: Model different purchase prices, deposits, and terms (coming soon)

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Last updated: 1 March 2026. Sources: RBNZ (rbnz.govt.nz), Kainga Ora (kaingaora.govt.nz), IRD (ird.govt.nz). LVR limits, speed limits, and exemptions are current as at March 2026 and are reviewed periodically by the RBNZ. This is financial information, not financial advice.