First Home Buyer Guide NZ 2026
Contents (10 sections)
- Step 1: KiwiSaver First Home Withdrawal
- Step 2: First Home Grant (Kainga Ora)
- Step 3: First Home Loan (Kainga Ora)
- Step 4: Understanding LVR rules
- Step 5: How much deposit do you actually need?
- Step 6: Getting pre-approved
- Step 7: Costs beyond the purchase price
- Worked example: First home buyer on $85,000 buying a $650,000 home
- Common questions
- What to do next
Buying your first home in New Zealand in 2026 typically requires a deposit of at least 5% to 20% of the purchase price, depending on the loan type. A first home buyer on an $85,000 salary purchasing a $650,000 home can combine their KiwiSaver balance, the First Home Grant (up to $10,000), and personal savings to cover the deposit and upfront costs. Here's how every piece fits together.
Step 1: KiwiSaver First Home Withdrawal
If you've been a KiwiSaver member for at least three years, you can withdraw most of your balance to put towards your first home. You must keep a minimum of $1,000 in your account (KiwiSaver Act 2006, IRD).
Eligibility rules
- You've been a KiwiSaver member for 3 or more years (continuous membership, not contributions)
- You're buying your first home (or you qualify as a "previous homeowner in a similar financial position to a first home buyer," which Kainga Ora assesses case by case)
- You're purchasing a home you intend to live in (not an investment property)
- You haven't previously made a KiwiSaver first home withdrawal
How much you can withdraw
You can withdraw your full balance minus $1,000. This includes your own contributions, employer contributions, government contributions, and any returns earned on those contributions. If your KiwiSaver balance is $45,000, you can withdraw up to $44,000 (IRD).
How to apply
Contact your KiwiSaver provider once you have a signed sale and purchase agreement. They'll need a copy of the agreement and proof of your first home buyer status. The process typically takes 5 to 10 working days. Your provider transfers the funds directly to your solicitor's trust account, not to you personally (IRD).
Plan ahead. Don't leave this until the last minute. Start the conversation with your KiwiSaver provider before you make an offer so you know exactly how much you can access and how long the process takes.
Step 2: First Home Grant (Kainga Ora)
The First Home Grant is a government grant administered by Kainga Ora that gives eligible first home buyers between $5,000 and $10,000 towards their purchase (Kainga Ora).
Grant amounts
| Existing home | New build or off-the-plan | |
|---|---|---|
| Per eligible buyer | $5,000 | $10,000 |
| Couple (both eligible) | $10,000 | $20,000 |
The grant is $1,000 per year of KiwiSaver membership, up to 5 years for an existing home ($5,000 max) or up to 10 years for a new build ($10,000 max). You must have been a KiwiSaver member for at least 3 years and contributing at least $1,042.86 per year (to receive the government member tax credit) for at least 3 of those years (Kainga Ora).
Income caps
Your income over the 12 months before you apply must be at or below (Kainga Ora):
| Buyer type | Income cap |
|---|---|
| Single buyer | $95,000 |
| Two or more buyers | $150,000 (combined) |
Income is assessed as your total before-tax income from all sources over the 12 months immediately before your application date.
House price caps by region
The property you're buying must be at or below the regional price cap (Kainga Ora):
Price caps as at February 2026 (Kainga Ora). Check the Kainga Ora website for the most current caps, as these are reviewed periodically.
These caps can be a constraint in Auckland and Wellington, where median house prices exceed the existing home cap. The grant is more achievable in smaller centres or for new builds, which have higher caps.
How to apply
Apply through the Kainga Ora website before settlement. You'll need your sale and purchase agreement, proof of KiwiSaver membership, proof of income, and identification. The grant is paid directly to your solicitor (Kainga Ora).
Step 3: First Home Loan (Kainga Ora)
The First Home Loan is a government-backed mortgage that allows eligible buyers to purchase with as little as a 5% deposit (Kainga Ora). It's available through participating lenders (currently Kiwibank, Westpac, BNZ, and selected other lenders).
How it works
Under normal LVR rules, most buyers need a 20% deposit. The First Home Loan lets you borrow up to 95% of the property value (5% deposit) without the lender needing to count the loan against their high-LVR lending cap. This makes banks more willing to lend to first home buyers with small deposits.
Eligibility
- Same income caps as the First Home Grant ($95,000 single, $150,000 combined)
- Same house price caps by region
- You must be a first home buyer (or qualifying previous homeowner)
- The property must be your primary residence
Important considerations
A 5% deposit means a 95% LVR. You'll pay a higher interest rate than someone with a 20% deposit (typically 0.25% to 0.50% more), and you may need to pay Lender's Mortgage Insurance (LMI) or an equivalent low-equity fee. On a $650,000 purchase with a 5% deposit ($32,500), your loan of $617,500 at a 0.25% higher rate costs about $1,544 more per year in interest compared to a standard LVR loan.
The benefit is that you get into the market sooner. The risk is that you have very little equity, so any drop in property values could leave you owing more than your home is worth (negative equity).
Step 4: Understanding LVR rules
Loan-to-Value Ratio (LVR) restrictions are set by the RBNZ and limit how much banks can lend at high LVRs.
Current LVR rules (RBNZ, 2026)
| Borrower type | Maximum LVR | Minimum deposit |
|---|---|---|
| Owner-occupiers (standard) | 80% | 20% |
| First home buyers (First Home Loan) | 95% | 5% |
| Investors | 65% | 35% |
Banks can make a limited number of loans above 80% LVR for owner-occupiers (currently up to 15% of new lending). This is why some buyers can get a mortgage with a 10% to 15% deposit even without the First Home Loan scheme, but bank discretion applies (RBNZ).
If you have less than a 20% deposit, expect to pay a low-equity margin (also called a low-equity premium or LEP) on top of the standard interest rate. This typically ranges from 0.25% to 1.00% depending on your LVR. The closer you are to 80% LVR, the smaller the margin.
Step 5: How much deposit do you actually need?
The deposit you need depends on the purchase price and the LVR available to you.
| Purchase price | 5% deposit (First Home Loan) | 10% deposit | 20% deposit (standard) |
|---|---|---|---|
| $500,000 | $25,000 | $50,000 | $100,000 |
| $600,000 | $30,000 | $60,000 | $120,000 |
| $650,000 | $32,500 | $65,000 | $130,000 |
| $750,000 | $37,500 | $75,000 | $150,000 |
| $900,000 | $45,000 | $90,000 | $180,000 |
Your deposit can come from a combination of sources: personal savings, KiwiSaver withdrawal, the First Home Grant, gifts from family (banks require a "gifting declaration" confirming the gift is not a loan), and in some cases proceeds from a flatmate or boarder relationship over time.
Most banks won't accept a deposit that's entirely from borrowed money (such as a personal loan or credit card). They want to see genuine savings as evidence of your ability to manage money and service a mortgage.
Step 6: Getting pre-approved
Mortgage pre-approval (also called conditional approval or approval in principle) is a letter from a bank confirming they'll lend you a specific amount, subject to conditions like a satisfactory valuation and sale and purchase agreement.
Why pre-approval matters
- You know your budget before you start looking
- Agents and sellers take your offers more seriously
- You can move quickly when you find a property
- It forces you to get your finances in order
What banks look at
- Your income (employment type, stability, length of time in role)
- Your expenses and existing debts
- Your deposit (size and source)
- Your credit history (any defaults, missed payments, or high credit card balances)
- The property itself (via a registered valuation)
Pre-approval typically lasts 60 to 90 days. If you don't find a property in that time, you can usually renew it, but the bank may reassess your application.
Step 7: Costs beyond the purchase price
The purchase price is just the start. Budget for these additional costs, which typically total $5,000 to $15,000 (or more) on top of your deposit.
| Cost | Typical range | Notes |
|---|---|---|
| Solicitor/conveyancing fees | $1,500 to $2,500 | Legal work for the purchase |
| Registered valuation | $600 to $1,000 | Required by most banks |
| Building inspection | $500 to $800 | Highly recommended for any property |
| LIM report | $200 to $400 | Land Information Memorandum from your local council |
| Moving costs | $500 to $2,000 | Depends on distance and volume |
| Immediate repairs/maintenance | $0 to $5,000+ | Budget a buffer for surprises |
| Low-equity fee (if applicable) | $0 to $10,000+ | One-off or added to your loan if LVR is above 80% |
| Loan application fee | $0 to $500 | Some banks charge this, many waive it |
There's no stamp duty in NZ (unlike Australia), and there's no land transfer tax for owner-occupied properties. This is a genuine advantage of buying in New Zealand.
Worked example: First home buyer on $85,000 buying a $650,000 home
Buyer profile:
- Age 30, single, earning $85,000 per year
- Been in KiwiSaver for 7 years at 4% contribution rate (example uses 4%, the rate from April 2028)
- KiwiSaver balance: $52,000 (approximate, based on contributions plus returns)
- Personal savings: $25,000
Funding the deposit
| Source | Amount |
|---|---|
| KiwiSaver withdrawal ($52,000 minus $1,000 minimum) | $51,000 |
| First Home Grant (5 years of KiwiSaver membership x $1,000) | $5,000 |
| Personal savings | $25,000 |
| Total available for deposit and costs | $81,000 |
The numbers
| Item | Amount |
|---|---|
| Purchase price | $650,000 |
| Deposit (from above) | $65,000 (10% LVR) |
| Mortgage required | $585,000 |
| Additional costs (solicitor, valuation, building inspection, moving) | ~$5,000 |
| Remaining savings buffer | ~$7,000 |
With a 10% deposit, this buyer's LVR is 90%. They'd face a low-equity margin of around 0.50% on top of the standard rate. If the standard 2-year fixed rate is 5.59%, they'd pay approximately 6.09%.
Monthly mortgage costs
| Amount | |
|---|---|
| Mortgage amount | $585,000 |
| Interest rate (2-year fixed + low-equity margin) | 6.09% |
| Monthly repayment (30-year term, P&I) | ~$3,530 |
| Annual repayments | ~$42,360 |
Affordability check
| Item | Annual | Weekly |
|---|---|---|
| Gross salary | $85,000 | $1,635 |
| PAYE | $17,928 | $345 |
| ACC levy | $1,420 | $27 |
| KiwiSaver (4%, post-purchase) | $3,400 | $65 |
| Take-home pay | $62,252 | $1,197 |
| Mortgage repayments | $42,360 | $815 |
| Remaining for living expenses | $19,892 | $383 |
That's $384 per week for food, transport, utilities, insurance, and everything else after mortgage payments. It's tight. This is why lenders stress-test your ability to pay at a higher rate (typically 2% to 3% above the current rate). A flatmate or partner's income makes a significant difference to affordability.
Once the LVR drops below 80% (either through repayments or property value increases), the low-equity margin comes off, reducing the monthly payment by roughly $150 to $250.
Common questions
How much deposit do I need for my first home in NZ?
With the Kainga Ora First Home Loan, you can buy with as little as a 5% deposit ($25,000 on a $500,000 home). Without it, most banks require at least a 10% to 20% deposit. A 20% deposit avoids low-equity fees and gets you a better interest rate. Your deposit can include KiwiSaver funds, the First Home Grant, personal savings, and family gifts (Kainga Ora, RBNZ).
Can I use my KiwiSaver to buy my first home?
Yes. If you've been a KiwiSaver member for 3 or more years, you can withdraw your full balance minus $1,000 to put towards a first home purchase. Contact your KiwiSaver provider once you have a signed sale and purchase agreement. The funds are paid directly to your solicitor's trust account. Allow 5 to 10 working days for processing (IRD).
What is the First Home Grant and am I eligible?
The First Home Grant is a government grant of $5,000 to $10,000 per eligible buyer ($1,000 per year of KiwiSaver membership, up to 5 years for existing homes or 10 years for new builds). To qualify, you must have been a KiwiSaver member for at least 3 years, earn under $95,000 (single) or $150,000 (couple), and buy a property below the regional price cap. The grant is administered by Kainga Ora (Kainga Ora).
What are the income caps for the First Home Grant?
The income cap is $95,000 per year for a single buyer and $150,000 combined for two or more buyers. Income is assessed over the 12 months before your application date and includes income from all sources (Kainga Ora).
What if I've owned a home before?
You generally can't access the First Home Grant or KiwiSaver first home withdrawal if you've previously owned a home. However, Kainga Ora can grant an exemption if you're in a similar financial position to a first home buyer (for example, you lost a property through a relationship breakup and have no significant property assets). These exemptions are assessed case by case (Kainga Ora, IRD).
How long does the home buying process take?
From getting pre-approved to settlement, the process typically takes 3 to 6 months. Pre-approval takes 1 to 2 weeks, house hunting is the variable part (weeks to months), making an offer and going unconditional takes 5 to 15 working days (depending on conditions), and settlement is usually 20 to 30 working days after going unconditional. Allow extra time if you're building a new home.
Do I need a building inspection?
There's no legal requirement, but skipping a building inspection is risky. A building inspection ($500 to $800) can uncover structural issues, weathertightness problems, code compliance issues, or hidden defects that could cost tens of thousands to fix. Most sale and purchase agreements include a building inspection condition, giving you the right to pull out or renegotiate if significant issues are found. On a $650,000 purchase, $600 for a building inspection is a small price for peace of mind.
What is LVR and how does it affect me?
LVR (Loan-to-Value Ratio) is your mortgage as a percentage of the property value. A $585,000 loan on a $650,000 property is 90% LVR. The RBNZ requires most owner-occupier loans to be at or below 80% LVR (20% deposit). First home buyers can access 95% LVR through the First Home Loan. Higher LVR means a higher interest rate (low-equity margin) and potentially a one-off low-equity fee (RBNZ).
What fees do I pay when buying a house?
Beyond the deposit, budget $5,000 to $15,000 for: solicitor/conveyancing ($1,500 to $2,500), registered valuation ($600 to $1,000), building inspection ($500 to $800), LIM report ($200 to $400), moving costs ($500 to $2,000), and a buffer for immediate repairs. If your LVR is above 80%, add a low-equity fee (varies). There's no stamp duty or land transfer tax for owner-occupied homes in NZ.
Can I buy a home with someone else?
Yes. You can buy with a partner, family member, or friend. Both (or all) buyers can use their own KiwiSaver withdrawal and First Home Grant entitlements, which can significantly increase your combined deposit. For the First Home Grant, the combined income cap is $150,000. Make sure you get independent legal advice on ownership structure (joint tenants vs tenants in common) and what happens if the relationship changes. A property sharing agreement drawn up by a solicitor is strongly recommended for non-partnered co-buyers (Kainga Ora).
What to do next
- NZ mortgage rates: Compare current rates across all major banks
- KiwiSaver contribution rates: See how your KiwiSaver rate affects your balance and take-home pay
- KiwiSaver first home withdrawal: Detailed rules and process for accessing your KiwiSaver
- PAYE calculator: Check your take-home pay to understand your borrowing power
- Mortgage calculator: Model different purchase prices, rates, and terms (coming soon)
Last updated: 28 March 2026. Sources: Kainga Ora (kaingaora.govt.nz), IRD (ird.govt.nz), RBNZ (rbnz.govt.nz). Grant amounts, income caps, and house price caps are current as at February 2026 and are reviewed periodically by Kainga Ora. This is educational content, not financial advice.
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This is educational content, not financial advice.