Key Takeaways
Good first home buyer mortgage advice in NZ starts with a budget you can live with, then works through your deposit, the lending rules and your loan structure in order. This guide covers each step, from KiwiSaver and the First Home Loan to pre-approval and settlement.
- Set your price range from a repayment you can comfortably manage, not the maximum a lender will approve.
- Budget for council rates, insurance, maintenance, legal fees and property checks, not just the mortgage.
- Most lenders look for a 20 percent deposit, but low-deposit options exist, including the Kāinga Ora First Home Loan.
- Your KiwiSaver savings can usually go towards your deposit after three years of membership, leaving at least $1,000 in the account.
- Keep your finances steady from pre-approval through to settlement.
Work out what you can really afford
Your budget is more than a purchase price and a calculator result. It needs to reflect how you actually live, including irregular bills, plans for children or study, and the cost of looking after a home. A lender sets the upper limit of what you can borrow, but your own comfort level should set the boundary.
Find a repayment you can live with
Start with your take-home pay and list what you spend each month: groceries, transport, childcare, subscriptions, insurance, savings and any support you give family. Then test whether a proposed mortgage repayment would still feel manageable if interest rates rose at your next refix, your expenses grew or one income dropped for a while.
A repayment that looks fine in a calculator can feel very different six months into ownership. Leave room for ordinary life rather than assuming every spare dollar will go to the home.
The ongoing costs of owning a home in NZ
The mortgage repayment is only part of the cost. Once you own a home, you will usually also pay:
- Council rates, and regional council rates where they apply.
- Home insurance, which lenders require before settlement.
- Body corporate levies if you buy a unit, townhouse or apartment.
- Water charges in some areas, plus power, internet and other utilities.
- Maintenance and repairs, which tend to be higher for older homes.
Ask for real figures rather than guessing. The council can tell you the current rates for a property, and an insurer can quote before you make an offer.
Upfront costs beyond the deposit
New Zealand has no stamp duty, but buying still comes with upfront costs. Allow for conveyancing and legal fees, a LIM report from the council, a builder's or building inspection report, a registered valuation if the lender asks for one, and moving costs. If you buy a unit title property, your lawyer will also review the body corporate records.
Keep a separate reserve for the first repairs and unexpected bills after you move in. An emergency fund helps protect your mortgage repayments if work or health changes unexpectedly.
Building your deposit
Your deposit affects which lenders will consider you, how your loan is priced and how much breathing room you have after settlement. Most first home buyers draw on a mix of savings, KiwiSaver and, sometimes, help from family.
How much deposit do lenders look for?
Many lenders look for a 20 percent deposit for an owner-occupied home. That reflects the Reserve Bank's loan-to-value ratio (LVR) rules: since 1 December 2025, banks can make no more than 25 percent of their new owner-occupier lending to borrowers with less than a 20 percent deposit. Lending with a smaller deposit is possible, but lenders ration it and may charge a low-equity margin or fee. Our guide on how much deposit you need for a first home in NZ goes into more detail.
Using KiwiSaver for your first home
If you have been a KiwiSaver member for at least three years, you may be able to withdraw your savings to buy your first home, leaving at least $1,000 in your account. The withdrawal can include your contributions, your employer's contributions, government contributions and investment returns. Money transferred in from an Australian superannuation scheme cannot be withdrawn for this purpose.
The home must be in New Zealand and you must intend to live in it. You apply through your KiwiSaver provider, usually once you have a sale and purchase agreement, and the money is paid to your lawyer for settlement. If you have owned property before, Kāinga Ora first assesses whether you are in a similar financial position to a first home buyer. Read more about the KiwiSaver first home withdrawal or the Kāinga Ora guidance.
Family help and gifted deposits
Many lenders accept gifted money towards a deposit, usually with a signed gift letter confirming the money does not need to be repaid. Some lenders also offer family guarantor arrangements, where a family member's property is used as extra security for part of the loan. These arrangements carry real risk for the person helping, so they should get independent legal advice before signing anything.
Note that the First Home Grant closed to new applications in May 2024, so it should not be part of your deposit plan.
Low-deposit options for first home buyers
If you have less than a 20 percent deposit, you still have options. Each one comes with its own criteria and costs, so it is worth comparing them side by side.
The Kāinga Ora First Home Loan
The First Home Loan lets eligible buyers borrow with a deposit of as little as 5 percent. It is offered through participating lenders and underwritten by Kāinga Ora. Current income caps are $95,000 before tax for a single buyer without dependants, and $150,000 for a single buyer with dependants or for two or more buyers combined. You must intend to live in the home, and a one-off lenders mortgage insurance fee applies, which can usually be added to the loan.
Criteria can change, so check the details on the Kāinga Ora First Home Loan page or with a participating lender before you rely on them.
Low-deposit lending from mainstream lenders
Some lenders will lend to first home buyers with a deposit between 10 and 20 percent within their share of the Reserve Bank's high-LVR allowance. Expect closer scrutiny of your income and spending, and possibly a low-equity margin or fee until your loan balance falls below 80 percent of the property's value.
Buying a new build
Lending to build a new home, or to buy a newly built home from the developer within six months of completion, is exempt from the Reserve Bank's LVR restrictions. That means some lenders are more flexible on deposits for new builds, although their own credit criteria still apply.
| Deposit route | Typical deposit | Key points to check |
|---|---|---|
| Standard lending | 20 percent or more | Widest lender choice and no low-equity charges. |
| Mainstream low-deposit lending | From around 10 percent | Rationed under LVR limits, may carry a low-equity margin or fee. |
| Kāinga Ora First Home Loan | From 5 percent | Income caps, owner-occupier only, one-off lenders mortgage insurance fee. |
| New build lending | Varies by lender | Exempt from LVR limits, but lender criteria and build risk still apply. |
Getting your finances application-ready
Preparation improves your choices and your confidence. The aim is not to make your finances look perfect for one day, but to show a stable picture you can keep up after you move in.
Check your credit report
You can ask New Zealand's credit reporting agencies for a copy of your credit report, usually free of charge. Check your personal details, accounts and repayment history, and ask the agency to correct anything that is wrong. Do this well before you apply, and avoid opening new credit accounts while you are preparing.
Reduce debt and credit limits
Lenders often assess credit cards on their limit rather than the balance owing, so an unused card with a high limit can reduce what you can borrow. Consider reducing limits or closing cards you do not need. Paying off a small loan or buy now pay later balance can also help, but do not drain your deposit or emergency savings to do it without checking the effect first.
Expect a close look at your spending
Under the Credit Contracts and Consumer Finance Act, lenders must make reasonable inquiries to be satisfied you can repay without substantial hardship. In practice, they will review recent bank statements, regular expenses and existing commitments. Spending patterns matter, so in the months before you apply, keep things steady and be ready to explain any large or unusual transactions.
Documents lenders usually ask for
- Photo identification and proof of address.
- Recent payslips and an employment contract, or financial statements if you are self-employed.
- Recent bank statements for all accounts.
- Evidence of your deposit, including your KiwiSaver balance and any gift letter.
- Details of all debts, including student loans, credit cards and hire purchase.
Pre-approval and making an offer
Pre-approval gives you a realistic price range before you start house hunting. It is not a final loan commitment, and the lender will still need to approve the specific property you choose.
What pre-approval means
A pre-approval is based on the income, expenses and debts the lender has reviewed. It usually lasts for a set period and comes with conditions, such as a satisfactory valuation and no change in your circumstances. Ask what conditions apply, how long it is valid and whether it covers the type of property you are looking at.
Conditional offers and auctions
Most first home buyers make conditional offers, with conditions such as finance, a building report, a LIM and a lawyer's review. Your lawyer should check the agreement before you sign. Buying at auction is different: the sale is unconditional when the hammer falls, so you need finance confirmed and your due diligence done beforehand. If you plan to use KiwiSaver for an auction purchase, talk to your provider early because the timing works differently.
Valuations and property checks
Lenders may require a registered valuation, especially for low-deposit lending. If the valuation comes in below the price you agreed, your options may include renegotiating, adding more cash or reconsidering the purchase. A building report looks at the condition of the home, which is a separate question from its value.
Choosing your loan structure
Once your loan is approved, the structure you choose affects your repayments and flexibility for years. Compare options together rather than focusing on a single headline rate.
Fixed, floating or split
A fixed rate gives you certainty for an agreed term, while a floating rate can change at any time but usually allows extra repayments without break fees. Many first home buyers split their loan across more than one fixed term, or between fixed and floating portions, to balance certainty with flexibility. Ask about break fees if you might sell, refinance or repay a lump sum during a fixed term.
Loan term and extra repayments
A longer loan term lowers each repayment but increases the total interest paid. Ask what extra repayments each portion allows. Even small regular increases can reduce your balance faster and help you move below 80 percent LVR, which may improve your pricing.
Protect your repayments
Your mortgage is likely to be a major long-term commitment, so think about how repayments would be met if you could not work because of illness or injury. Insurance such as mortgage protection cover is worth discussing with an adviser alongside your loan.
How SHARE - The Advisory can help
SHARE - The Advisory works with first home buyers to set a realistic budget, plan the deposit, compare lenders and structure the loan. Because we also advise on KiwiSaver and insurance, we can help you see how the pieces fit together. See our first home buyer lending advice, or contact an adviser to talk through your situation.
Conclusion
Buying your first home is more manageable when you take the decisions in order: set a budget you can live with, build your deposit, understand the low-deposit options, prepare your finances and then choose a loan structure that fits your plans.
The rules around KiwiSaver, the First Home Loan and lending limits can change, so check the current settings before you commit and get advice on how they apply to you.
Frequently Asked Questions
Can I buy a first home in NZ with a 5 percent deposit?
Possibly. The Kāinga Ora First Home Loan allows a deposit from 5 percent for eligible buyers within the income caps, and some new build lending is more flexible. Lender criteria still apply.
How much of my KiwiSaver can I use for a first home?
After at least three years of membership, you can usually withdraw everything except $1,000, including employer and government contributions. Money transferred from an Australian superannuation scheme cannot be withdrawn.
Is the First Home Grant still available?
No. The First Home Grant closed to new applications in May 2024.
What costs should I budget for besides the deposit?
Allow for legal fees, a LIM report, a building report, a valuation if required, moving costs, and ongoing costs such as council rates, insurance, maintenance and any body corporate levies.
Does pre-approval mean my home loan is approved?
No. Pre-approval is conditional and the lender still needs to approve the specific property, usually after a valuation and a check that your finances have not changed.
Should I use a mortgage adviser as a first home buyer?
Many first home buyers find advice helpful for comparing lenders, understanding low-deposit options and preparing a strong application. An adviser can also coordinate the process with your lawyer and lender.