Understanding loan-to-value ratio

An LVR is not cute text-talk for your significant other, it stands for loan-to-value ratio (LVR) and it looks at how much you're looking to borrow, relative to the value of the house you want to buy.

Changes to the Reserve Bank LVR restrictions

There have been changes to the Reserve Bank loan-to-value ratio (LVR) restrictions. If you’re buying an investment property, you’ll now require a 30% deposit while we transition to meet the Reserve Bank LVR restrictions.

Working out how big a deposit you need

An LVR looks at the size of your loan in comparison to the value of your property. For example, if your house is worth $500,000 and you have a deposit of $100,000, you need a home loan of $400,000, which would make your LVR 80%.


  • If you’re buying a house to live in, you’ll generally need a deposit of at least 20% - this will give you an LVR of 80%
  • If you have 5% deposit, then you may be eligible for the First Home Loan initiative.
  • If you have 10% - 19% deposit, then you might want to look at our low deposit options available for first time buyers.
  • 0% deposit options aren't available – you'll always require a deposit, but it may be less than you first thought.

You'll still need to meet our servicing critera to ensure that you're able to make repayments on your loan.


If you're buying a residential investment property, we'll discuss your specific LVR requirements depending on your circumstances.

Exceptions to the rule

When it comes to LVRs over 80%, exceptions can be made in certain circumstances. If you have a low deposit, it’s still worth talking to one of our home loan experts about your options. We've also got First Home Saver that might be good for you.

If you’re a first-time buyer, there are also lower deposit options worth exploring, like the Government’s First Home Loan and First Home Grant policies, which can help first timers buy houses with deposits of just 5%.

Why do we have LVRs?

The Reserve Bank of New Zealand is New Zealand’s central bank, and it supervises all registered banks operating in the country.

In May 2020, the Reserve Bank removed LVR restrictions which it had put in place in October 2013 (at that time, they were concerned about rapidly rising house prices, coupled with an increasing use of low-deposit loans). This doesn’t mean that you'll no longer need a deposit. It simply means that banks can lend to customers that we may not have been able to when the restrictions were in place.

Talk to an expert

At any stage of your home buying journey, our home loan experts are available to give you obligation-free advice and guide you through the process right to the end.