Two deposits, and people mix them up constantly
There is the deposit you pay the builder to sign a contract, and there is the equity your bank wants you to have in the finished property. They are different numbers, paid to different people, at different times, and confusing them is the single most common reason someone thinks a build is out of reach when it is not.
The builder's deposit is a modest percentage of the contract price, paid on signing, that secures your place in the programme and covers the design and consent work that starts immediately. The bank's deposit is the share of the total value you are funding yourself rather than borrowing.
What the bank is actually looking at
For a new build, a bank lends against the completed value of the house and land, supported by a registered valuation and the building contract. The usual expectation for an owner-occupier is twenty percent equity in that completed value, though new builds have long been treated differently from existing homes under lending rules, and that has generally worked in a new-build buyer's favour.
Bank policy moves, and it moves faster than any website updates. Get a current answer from your own bank or a mortgage broker before you plan around a number. What does not change is what they will want to see: the contract, the plans and specification, the valuation, and evidence your income services the finished loan.
- Deposit is measured against the completed value, not against the land price alone
- KiwiSaver first home withdrawal can generally be used toward a first home you are building
- A pre-approval before you fall in love with a section saves an enormous amount of grief
- Ask your broker specifically about new-build treatment, because it differs from existing homes
How turnkey changes the cash flow
On a turnkey package you pay the builder's deposit and then nothing more until the house is finished and the code compliance certificate is issued. You settle once, at the end, and you move in.
That matters more than most people realise. Through the whole build you are not servicing a construction loan, so you keep paying rent or your existing mortgage and nothing else. Compare that with progress payments, where the loan is drawn in stages and you pay interest on every drawn dollar from the moment it is drawn, on top of wherever you are already living. On a six month build that difference is real money.
The trade-off is flexibility. Turnkey locks the specification early, which is exactly what makes the price hold. If you want to be changing things at lock-up, progress payments are the structure that allows it.
The costs that are not the deposit
Budget for these separately, because none of them are in the build price and all of them turn up.
- Legal fees for the land purchase and the build contract review
- A registered valuation, usually required by the bank
- LIM report and any specialist reports you commission before buying
- Council development contributions and service connection fees, where these sit outside the contract
- Moving, whiteware if it is not in the specification, and the fencing your neighbour will want to talk about
Work out what you can actually carry
Our mortgage calculator turns a total price into a weekly figure at a stated deposit, term and rate, and the build-cost calculator works backwards from the home you want. Both are free and neither asks for your email.
Every package price on this site also carries an indicative weekly cost based on a twenty percent deposit over thirty years, so you can compare homes on what they cost to live in rather than on the headline number.
Map payments to milestones
List the payment events in the proposed agreement and the information the lender needs for each. Add land, professional work and moving costs that may sit outside those payments. Use this to prepare a conversation with your lender, not as a lending approval.
- Which payment is due at each milestone?
- What does the lender need before releasing funds?
- Which costs must be covered separately?
Quick answers
Can I use KiwiSaver to build my first home?
Generally yes. The first home withdrawal can usually be applied to building a first home as well as buying an existing one, with conditions on eligibility and timing. Your KiwiSaver provider and your solicitor are the people to confirm the detail with, and worth talking to early because the withdrawal takes time to process.
Do I need to own the land first?
Not with a house and land package. The land and the build are handled together, and on a turnkey package you settle the whole thing once at completion. If you already own a section, we build on it, and the deposit conversation is simply about the build contract.
Is a bigger deposit worth it if I can manage one?
That is a question for your broker rather than your builder, and the answer depends on your rate, your other debt and what else the money could do. What we can tell you is what the home costs and what it costs weekly at different deposits, which is what the mortgage calculator is for.