Gifted Deposits vs. Genuine Savings: Why the Bank Treats Them Differently
A quick heads-up: The information in this article is designed as a general educational guide only and does not constitute personalised financial, tax, or legal advice. Because everyone's situation is unique (and bank policies change frequently), we recommend speaking with a licensed Financial Adviser to see how this applies to your specific circumstances. For full transparency on our terms of service, how we are remunerated by lenders, and any specific situations where a fee may apply, please read How We Get Paid.
Imagine two first-home buyers walking into a bank. Both have exactly $50,000 sitting in their accounts for a house deposit.
Buyer A spent the last three years putting a slice of every payslip into a high-interest savings account to reach that $50,000 milestone.
Buyer B had $5,000 saved, and yesterday, their generous parents transferred $45,000 into their account to get them across the line.
To you, both bank accounts show the exact same balance. But to a bank reviewing a mortgage application, these two deposits are viewed very differently.
If you are gearing up to buy your first home, understanding the difference between "genuine savings" and a "gifted deposit"—and how lenders view each—is essential to getting your loan approved without surprises.
What banks actually mean by genuine savings
To a bank, genuine savings simply means money you have accumulated yourself over time through regular, disciplined contributions.
When a lender looks at your bank statements over three to six months, they aren't just looking at the final balance. They want to see that you consistently spend less than you earn.
Why? Because paying a mortgage takes habit and routine. If you can show that you regularly tuck away savings each week or month without having to dip back into it, the bank knows you have the financial discipline to comfortably handle ongoing mortgage payments.
How gifted deposits work
A gifted deposit is a lump sum given to you by family members (usually parents) to help you buy a house.
With house prices where they are today, family support plays a role in a huge number of first-home purchases. Banks are completely happy to accept gifted funds, but they have two simple ground rules:
The 5% rule for deposits under 20%
Where the difference between these two deposit types really matters is when you have an under 20% deposit.
If you are buying a home with a 10% deposit, almost all New Zealand banks have a baseline requirement: at least 5% of the purchase price must come from your own genuine savings.
If you are buying an $800,000 house, 5% is $40,000. Even if your parents are willing to gift you $80,000, the bank will generally still decline the application if you haven't shown you can save that core 5% yourself (through your cash savings or KiwiSaver).
The gift is a huge help to get you to your target, but on an under 20% deposit, it cannot completely replace your own savings track record.
The Kāinga Ora First Home Loan exception
The biggest exception to the genuine savings rule is the government-backed Kāinga Ora First Home Loan.
Read more about the Kāinga Ora First Home Loan scheme here.
How we help piece your deposit together
Navigating deposit rules can feel confusing, especially when family money is involved or you are working with an under 20% deposit.
At Home Loan Factory, we look at your accounts before you ever talk to a bank. We will tell you upfront whether your savings meet the bank's rules, provide the right gifting forms for your family, and let you know whether a standard bank loan or a Kāinga Ora loan is your best path forward.
Not sure if your deposit hits the mark? Get in touch with the team at Home Loan Factory today for a clear, easygoing chat about your options.
