Your deposit, line by line: KiwiSaver, gifts and the 5% option

Twenty per cent is the number most people have in mind, and for a standard purchase from a bank it is still the benchmark that gets you the widest choice of lenders and avoids a low-equity premium. Eligible first home buyers have a genuine alternative. The Kainga Ora First Home Loan allows a deposit as low as 5% through participating lenders, subject to income caps, regional price caps and the usual servicing assessment. It is not automatic and the caps change, so it is worth checking current criteria rather than relying on what someone was told a few years ago. KiwiSaver is the most commonly used source. If you have been a member for at least three years you can usually withdraw most of your balance towards a first home, subject to the scheme's rules and a minimum deposit requirement. You apply through your provider and it takes time, so start earlier than you think you need to. Gifted deposits are accepted by most lenders, but the paperwork matters. A letter from the person gifting the money confirming the amount, that it is a gift and not a loan, and that they do not expect repayment, is normally required. Some lenders also want to see the funds in your account before approving. Where the money came from is part of the assessment. Lenders check statements for the last three months and want a clear trail: savings, sale of an asset, a gift, KiwiSaver. Large unexplained deposits are the type of thing that stalls an application, so if money has moved recently, have the explanation ready. A useful exercise before you talk to anyone: write down every source of your deposit, the amount and the evidence you can produce for it. That list is what a lender will ask for anyway.