How to Get a Mortgage with a Small Deposit in Invercargill

May 13, 2025 at 2:31 PM

With Invercargill’s lower house prices and supportive lending options, owning a home with a smaller deposit is possible. Here’s how to do it—with guidance that’s local, practical, and designed for you.

1. What Is Considered a Small Deposit in Invercargill?

Traditionally, banks prefer a 20% deposit—but this isn’t a hard rule. Many lenders will consider applications with 10% or even 5% deposits, particularly for first-home buyers.

In Invercargill, the numbers work in your favour:

Average House Value (QV - February 2025): ~$500,344

- 20% deposit = $100,069

- 10% deposit = $50,035

- 5% deposit = $25,018

source: www.qv.co.nz/news/

Compared to other parts of the country, Invercargill offers an affordable entry point, making homeownership more realistic for buyers with limited savings.

2. Use the First Home Loan and KiwiSaver to Boost Your Buying Power

While the First Home Grant is no longer available, two powerful tools remain accessible for Invercargill first-home buyers:

First Home Loan (Minimum 5% Deposit Option)

  • Allows eligible buyers to purchase with as little as a 5% deposit.
  • Offered through participating lenders, supported by Kāinga Ora.

Invercargill’s house prices are comfortably under the regional price cap, making this option very viable here.

Minimum of 10% Deposit with Some Banks (Outside Kāinga Ora)

Some mainstream banks that are not part of the Kāinga Ora First Home Loan scheme also offer home loans with as little as a 10% deposit. These can be an excellent alternative if you don’t meet Kāinga Ora’s eligibility requirements.

However, it’s important to note:

- These banks have different lending criteria and may require stronger income or credit profiles.

- As these loans are considered “low equity” (over 80% LVR), banks are limited in how many they can offer under their regulatory caps.

- Availability can fluctuate—they may pause or limit approvals depending on current lending volumes or risk appetite.

We closely monitor which banks are actively accepting 10% deposit applications and can help position your application with the right lender at the right time.

KiwiSaver First-Home Withdrawal

If you’ve contributed to KiwiSaver for at least 3 years, you can withdraw nearly all your balance (including employer contributions and returns).

Many buyers in Invercargill use this to form the majority—or entirety—of their deposit.

3. What Invercargill Lenders Want to See from Low-Deposit Buyers

When applying for a mortgage with a small deposit, Invercargill banks and lenders will assess your full financial profile to ensure you're a strong candidate. Here's what makes a difference:

  • Steady income from regular employment
  • Low personal debt and manageable financial commitments
  • Clean account conduct—no overdrafts, defaults, or late payments
  • A clear budget that shows you can meet repayments comfortably

As local advisers, we understand exactly what each bank is looking for—and can help tailor your application to suit.

4. Family Support in the Invercargill Market

In many Invercargill purchases, family plays a role in helping buyers get over the deposit hurdle. This might include:

- Gifting a portion of the deposit, with a signed non-repayable gift declaration

- Acting as a guarantor, securing part of the loan with equity from their own property

- Joint purchases, such as buying together with a sibling or friend

5. Why Local Advice Makes the Difference

Invercargill’s property market has unique opportunities—and challenges—that require local insight. At Mortgage Field, we live and work in this community. We know the lenders, understand the housing stock, and see the patterns that matter to your success.

With us, you’ll get:

  • Access to lenders open to 5–10% deposits
  • Expert guidance on structuring your First Home Loan application
  • Step-by-step support throughout your home buying journey

Let's Get You into Your First Invercargill Home

You don’t need a massive deposit to own a home in Invercargill—you just need a plan, and the right people backing you.

  • Book a free consultation with our Invercargill-based team
  • Mortgage Field – Local Advice. Real Confidence.