Most banks typically require a 20% deposit, which can make homeownership challenging for many first-home buyers. The First Home Loan reduces this hurdle by allowing approved applicants to purchase with as little as a 5% deposit. These loans are offered through selected banks and lenders, with Kāinga Ora underwriting them to reduce the lender’s risk.
If saving even a 5% deposit feels out of reach, you may be able to use your KiwiSaver first-home withdrawal or receive a gifted contribution from family to meet the requirement.
To qualify for a First Home Loan, applicants must:
Be a New Zealand citizen, permanent resident, or resident visa holder living in New Zealand.
Be currently employed in New Zealand, with at least 12 months of continuous employment. If employed for less than 12 months, you must show evidence of stable work in the same industry over the past two years.
Be a first-home buyer, or in a similar financial position to one.
Meet the income cap requirements:
$95,000 or less (for an individual without dependents).
$150,000 or less (combined income for a couple or an individual with dependents).
Have a minimum 5% deposit, which can come from savings, KiwiSaver, or a family gift.
Be purchasing a home to live in, not as an investment.
Check Your Eligibility – Make sure you meet the above criteria.
Choose a Lender – The First Home Loan is available through selected banks and lenders.
Secure Your Deposit – Ensure you have at least 5%, whether from savings, KiwiSaver, or a family gift.
Apply for Pre-Approval – The lender will review your application, including any additional lending requirements.
What if my application is declined by one lender?
Every lender has slightly different criteria. If one declines your application, it’s worth trying another.
Can I use my KiwiSaver for the deposit?
Yes. If you have contributed to KiwiSaver for at least three years, you may be eligible to withdraw funds to put towards your deposit.
What is the 1.2% fee associated with the First Home Loan?
This is the Lender’s Mortgage Insurance (LMI) premium, which covers the lender’s risk. In most cases, it can be added to your loan amount.
Can I use the First Home Loan to build a new home?
Yes, some lenders allow this. Requirements vary, so it’s important to confirm with your lender.
Buying your first home can feel overwhelming, but you don’t need to navigate the process alone. At Smartmortgages.co.nz, we specialise in guiding first-home buyers through every step and securing the right mortgage solution.
Contact us today to discuss your options and take the first step towards homeownership.
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Cong.Nguyen@smartmortgages.co.nz
0223985140
Monday - Sunday by appointments
44 William Wallbank Crescent, Swanson, Auckland 0614
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