Buying Your First Home with 5% Deposit

At Smartmortgages.co.nz Limited, we understand how challenging saving for a home deposit can be, especially for first-home buyers.

The good news is that owning your first home with as little as a 5% deposit is possible. There are two main options available depending on your situation:

1. Kainga Ora – First Home Loan

You may be eligible for the First Home Loan, backed by Kainga Ora, a government initiative designed to help New Zealanders get onto the property ladder sooner.

With this option, participating lenders can offer loans with just a 5% genuine deposit, provided you meet certain criteria.

To qualify, you must:

• Be a New Zealand citizen, permanent resident, or resident visa holder who is ordinarily resident in New Zealand

• Be a first home buyer, or a previous homeowner in a similar financial position to a first home buyer

• Be currently employed in New Zealand with at least 12 months of continuous work (or show stable employment in the same industry over the past two years)

• Have a before-tax income of:

  • $95,000 or less for an individual buyer without dependants, or

  • $150,000 or less for an individual with dependants, or

  • $150,000 or less (combined) for two or more buyers

• Have a minimum 5% deposit of the purchase price (including savings, KiwiSaver first home withdrawal, and gifts)

• Be purchasing a home to live in as your main residence

• Not own any other property or land, except Māori land

• Be purchasing a property under 1 hectare in size

• Pay a 1.2% Lenders Mortgage Insurance (LMI) premium, either upfront or added to your loan. (Note: some lenders may cover 0.2%, so you only pay 1% LMI.)

2. Non–First Home Loan (if you do not meet Kainga Ora criteria)

If you are not eligible for the Kainga Ora First Home Loan, some lenders can still consider a 5% deposit application, provided you meet stricter lending requirements.

To qualify, you’ll generally need:

• A live deal, meaning you have already signed a Sale & Purchase Agreement (subject to finance — ideally 15 working days for approval)

• Excellent credit history, with no late payments or defaults

• Stable income and employment, and strong serviceability based on your income, expenses, and other finance commitments

• A property located in or near a main city or metropolitan area (preferred by most lenders)

We Are Here to Help You Make It Happen

At Smartmortgages.co.nz, we are passionate about helping everyday Kiwis achieve their dream of home ownership.
We have successfully helped many clients buy their first homes with just a 5% deposit, and we can help you too.

Call us today on 022 398 5140 so that we can guide you through this exciting journey. Your first home could be closer than you think. Sometimes, it is just one phone call away.