New Build Deposits Explained: 5%, 10%, Progress Payments and Turnkey Structures

Which deposit?

The seller's deposit is an advance payment under your sale and purchase agreement. Your lender's deposit is your own contribution to the purchase, alongside the loan. Settled's deposit definition makes this distinction. Money already paid to the seller normally counts towards the purchase price; it is not an extra charge on top.

A builder may separately ask for an initial payment under a building contract. Establish whether you are buying a finished property or buying land and commissioning construction. Ask what each percentage is calculated on: the whole package, the land, or the build alone.

A worked example

These are illustrations using an assumed $800,000 purchase price, not current listing prices or lending offers:

• A 5% seller deposit is $40,000, leaving $760,000 of the price unpaid.
• A 10% seller deposit is $80,000, leaving $720,000 unpaid.
• If your approved loan is $640,000, your total contribution is $160,000. After paying a $40,000 seller deposit, you still need $120,000 towards the price at settlement.

Legal fees, valuations, moving costs and any lender fees sit outside that simple purchase-price calculation. Keep an accessible reserve for costs and changes in timing.

5% and 10% deposits

First establish whether a low-deposit offer describes the supplier's payment terms or a loan you qualify for. As checked on 2 November 2026, Kāinga Ora's First Home Loan guidance states a 5% deposit requirement through participating lenders. Eligibility and the lender's approval still matter. It is not a promise that every buyer or new-build contract will qualify.

A seller accepting 10% upfront also does not establish your bank's required contribution. Ask your lender to confirm the amount it will lend against this property, the valuation basis, affordability checks, any low-equity costs and all conditions in writing. Tell it whether you are buying to live in or to rent out.

What recent lending shows

Lower-equity lending does occur. In September 2026, approximately 55.6% of the value of first-home buyer mortgage commitments reported in the Reserve Bank's C31 table was above 80% loan-to-value ratio (LVR). This is calculated from $850 million out of $1,530 million in its rounded figures, released on 27 October 2026. See the Reserve Bank September 2026 lending data.

This measures lending value across new and existing homes, not the share of applicants approved. Above 80% LVR does not tell you how much was lent at 90% or 95% LVR. Use it as a reason to ask about your options, never as evidence that a 5% or 10% deposit will be accepted. Our new-build finance guide covers the wider questions to take to your lender.

Using KiwiSaver

Inland Revenue's first-home withdrawal guidance, checked on 2 November 2026, says you must have been in KiwiSaver for at least three years and leave $1,000 in your account. Australian complying-superannuation transfers cannot be withdrawn for this purpose. Confirm your eligibility, available amount and release process with your provider and lawyer before agreeing a deposit date. Your account balance is not necessarily the amount available to pay.

Turnkey payments

Under a deposit-and-balance structure, you pay the agreed initial deposit and the remaining purchase price at settlement. Settled's off-plan buying guidance describes this general pattern. Check the actual agreement: a turnkey label does not establish the deposit amount, inclusions, refund rights or settlement conditions.

• Identify who receives the deposit, who holds it and when it may be released to the seller or developer.
• Ask your lawyer to explain stakeholder or trust-account terms, interest, refund conditions and the effect of developer failure.
• Confirm what triggers settlement, including title and completion documents, and how much notice you receive.
• Ask what happens to the deposit if the project is delayed, changed or cancelled, including any sunset clause.

Settled also flags changing lending conditions, falling values and delays as off-plan risks. A deposit paid today does not lock in finance for a settlement many months away. Ask when your approval expires and what must be reassessed. Read our turnkey home guide and off-plan contract checklist alongside the proposed agreement.

Progress payments

If you buy the section and commission a build, you may settle the land first, pay an initial building-contract amount, then make payments as construction progresses. MBIE's contract and payment guidance recommends confirming the payment schedule in your contract. There is no single schedule to assume from a package advertisement.

Ask for every payment amount, its due date or stage, and the evidence needed to show the stage is complete. Have your lender check this against its drawdown requirements before signing. An invoice becoming due and the bank being ready to release funds are separate events. Ask who checks the work and how variations are approved and funded.

Plan for rent or other accommodation while construction proceeds, loan costs as funds are drawn and a delay scenario. Confirm required valuations, inspections and insurance directly with your lender and insurer. MBIE's building contract checklist covers payment stages, variations and written insurance responsibilities. Agree the complete scope and a process for cost overruns.

Before you pay

Request the draft agreements and a dated payment schedule for the exact listing. Give your advisers the documents rather than relying on an advertised percentage. These questions make a useful first enquiry:

1. What dollar amount is due first, what is it calculated on and when must I pay?
2. Is any reservation payment separate, credited to the price or refundable? Where are those terms written?
3. Who holds each payment, when can it be released and what happens if the project fails?
4. Are there land settlement, stage, upgrade or other payments before final settlement?
5. What documents and conditions must be satisfied before the final balance is due?
6. Will my lender fund this exact structure, including any gap between payment dates and drawdowns?
7. How much of my contribution must be available at each stage, and how will KiwiSaver funds be released?
8. What happens if the valuation, my finances or the completion date changes?

Have your lawyer explain cancellation, default and refund clauses before you commit. Do not assume a deposit is the most you could lose if you cannot settle. If a building payment is disputed, get prompt advice on the contract and payment-claim process rather than simply withholding payment. For broader package questions, use our house and land enquiry checklist.