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Home Loan Options for First Home Buyers

Home Loan Options for First Home Buyers

For most first home buyers, the biggest hurdle is saving the 20 per cent deposit that many lenders require. Trying to keep up with rising house prices while saving a big enough deposit can feel impossible! If you’ve already started saving but you’re not quite there yet, there are other deposit options available to first home buyers that could make owning a first home a reality much sooner.

The First Home Loan programme

Formerly known as The Welcome Home Loan, government’s First Home Loan programme helps first home buyers who can afford to repay a mortgage, but who may be struggling to save a large enough deposit.

First Home Loans are issued by selected banks, building societies, and credit unions, and are underwritten by Kāinga Ora – Homes and Communities. To be eligible for the First Home Loan approval, you must:

  • Earn a maximum annual income up to $85,000 (before tax) for 1 person, or a combined annual income up to $130,000 (before tax) for 2 or more people buying a first home together.
  • Have already saved 5 per cent of the purchase price of the home you intend to buy.
  • Be buying a home that is priced under the regional house price cap for the area you’re buying in. (House price caps vary from region to region and for existing or older homes versus new builds.)
  • Be a first home buyer or in a similar financial position to a first home buyer. You cannot already own property.
  • Intend to live in the property. First Home Loans can’t be used to buy an investment or rental property.
  • Be a New Zealand citizen or permanent resident or a resident visa holder who is ordinarily resident in New Zealand.
  • Be a minimum of 18 years’ old.

In addition to these eligibility criteria, banks’ lending criteria will also apply and lenders will do the usual credit checks to ensure you’re able to repay your home loan.

You can find out more information about the First Home Loan scheme – including house price caps per region – here.

KiwiSaver First Home Withdrawal and First Home Grant

The KiwiSaver First Home Withdrawal and First Home Grant are another two options that could help you save a deposit faster.

In order to receive either or both of these options, you’ll need to have been contributing to KiwiSaver for at least three years and meet certain eligibility criteria.

For the KiwiSaver first home withdrawal, you may be able to withdraw all of your KiwiSaver funds – including any contributions made by you and your employer, Government contributions and investment earnings – provided:

  • You’ve been a contributing KiwiSaver member for three years or more.
  • You’ve never withdrawn from KiwiSaver to buy a home or land before.
  • You intend to live in the property you’re buying.

You need to leave at least $1000 balance in your KiwiSaver account.

To be eligible for the First Home Grant, you must:

  • Have been contributing to KiwiSaver for at least three years.
  • Have earned no more than $85,000 (before tax) for an individual buyer, or a combined maximum annual income of $130,000 (before tax) for two or more buyers in the last 12 months.
  • Have not previously received a First Home Grant, HomeStart Grant or KiwiSaver deposit subsidy.
  • Have at least 5 per cent of the purchase price of the property.
  • Be 18 years or over.

The First Home Grant provides:

  • $1,000 for each year of contribution to KiwiSaver, up to a maximum of $5,000 for individuals or $10,000 for two or more buyers, to be used to buy an existing or older home.
  • $2,000 for each year of contribution to KiwiSaver, up to a maximum of $10,000 for individuals or $20,000 for two or more buyers, to be used to buy a new home, land to build a new home, or a home bought off the plan.

Getting help from family

If you have family members who are able to help you buy a first home, there are some ways they can do this:

  • Act as guarantor: using their own property as security, a family member could guarantee part of your deposit secured against their own property.
  • A cash gift: some families choose to share out the inheritance early with a cash gift or no-interest loan to go towards the deposit for a first home.

Home loans for first home buyers

At Mortgage Express, we understand that buying a first home can be incredibly challenging, particularly in these economic times. But there are still options for first home buyers that could help you get into your first home much sooner.

If you’d like to find out about any of the deposit options listed above that you may be eligible for, get in touch with our team of mortgage advisers.

For more tips and advice around managing your money, consolidating your debts, or applying for finance, follow Mortgage Express on Facebook and Twitter, or contact one of our mortgage advisers.


While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.

A Disclosure Statement is available on request and free of charge.

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