First Home Buyers NZ: 5% Deposit, Grants & Loans Guide

First home buyers in New Zealand now have access to government-backed schemes that cut the traditional deposit hurdle dramatically. But accessing these schemes requires navigating eligibility rules, income caps, and lender requirements — and the lower deposit path costs more over the life of the loan.

Minimum deposit via First Home Loan: 5% ·
Eligible First Home Loan amounts: From govt schemes ·
KiwiSaver withdrawal option: Available for first homes ·
Cash contribution example: $5,000+ for loans $250k+ ·
Primary provider: Kāinga Ora

The table below consolidates key figures sourced from official government agencies and verified advisers.

Is the first home buyers grant still available in NZ?

Yes — the First Home Grant remains active in 2026, administered by Kāinga Ora (New Zealand’s government housing authority). This is a cash contribution paid directly into your deposit, not a loan, and it sits alongside the separate First Home Loan scheme.

Eligibility criteria

To qualify for the First Home Grant, you must have been a KiwiSaver member for at least three years. The property must be your primary residence, you need to be 18 or older, and you must be a New Zealand citizen or permanent resident. Income limits are $95,000 for solo buyers and $150,000 for couples or groups applying together.

Regional house price caps still apply to the grant, which means Auckland typically faces stricter limits than Christchurch or other regions. Budget 2022 announced changes to the scheme alongside updates to First Home Loan and Kāinga Whenua loan products.

Application process

You apply for the grant through the Kāinga Ora portal before you find a property — not after. Once pre-approved, you have three months to find a home that meets the criteria. Only after settlement does Kāinga Ora pay the grant into your solicitor’s trust account.

Can you buy a house in NZ with a 5% deposit?

Absolutely, via the First Home Loan. Kāinga Ora (government housing agency) underwrites the loan, allowing participating banks to accept lower deposits than they would normally consider. The scheme does not impose national house price caps — those were removed in 2022 — but individual lenders will still assess your borrowing capacity.

First Home Loan details

A First Home Loan lets you borrow with a 5% deposit instead of the standard 20%. On a $500,000 property, that is $25,000 versus $100,000 — a $75,000 difference that makes ownership feasible for buyers who have struggled to save a traditional deposit.

You will pay a 1.2% Lender’s Mortgage Insurance premium on the loan amount, which adds approximately $5,700 on a $475,000 mortgage. That is a one-time upfront cost but it enables the lower deposit entry.

Kāinga Ora requirements

You must be a New Zealand citizen or permanent resident ordinarily living in New Zealand, intend to use the property as your primary residence, and meet the income caps. The property must be on less than 1 hectare of land, in move-in condition, with no major deferred maintenance. Lenders will allow up to $10,000 in outstanding repairs.

KiwiSaver savings, family gifts, and other genuine savings can all go toward the 5% deposit requirement. The Co-operative Bank (participating lender) confirms the scheme accepts these contributions as long as they are documented.

How much deposit do first home buyers need in NZ?

It depends on which scheme you are using. Without government help, most New Zealand lenders require 20% — which on a median-priced home is a substantial sum to save. The First Home Loan brings that down to 5%, and the First Home Grant puts additional cash into your deposit from day one.

Standard vs scheme deposits

A standard mortgage on a $500,000 property requires $100,000 saved as a deposit. The First Home Loan cuts this to $25,000. If you are buying an existing home and qualify for the First Home Grant, Kāinga Ora adds $5,000. For a new build, the grant reaches $10,000. Used together, these schemes can reduce the cash you need to find dramatically.

The catch is that borrowing more against the property means higher total interest paid over the life of the loan. MoneyHub (consumer finance guide) notes the comparison is stark on a $500,000 property — the lower deposit path costs more in the long run even if it gets you in the door sooner.

KiwiSaver contributions

Your KiwiSaver savings can be withdrawn in full for your first home purchase. To access the First Home Grant, you need at least three years of KiwiSaver membership — but even without the grant, your accumulated savings represent a meaningful deposit contribution. If you are self-employed or irregularly employed, check whether your KiwiSaver balance is enough to cover the 5% threshold on your target property price.

How much deposit do you need for a $400,000 house?

On a standard mortgage you need $80,000 — 20% of $400,000. Through the First Home Loan, that drops to $20,000. Add the one-time 1.2% LMI premium on the $380,000 loan ($4,560), and your total upfront cash to close still comes in well under $30,000.

Calculations for example prices

• $300,000 property: $15,000 deposit via First Home Loan, plus $3,420 LMI = roughly $18,420 cash needed
• $400,000 property: $20,000 deposit, plus $4,560 LMI = roughly $24,560 cash needed
• $600,000 property: $30,000 deposit, plus $6,840 LMI = roughly $36,840 cash needed

These figures exclude legal fees, valuation costs, and building inspection — all of which add 1–2% to your total upfront cost. One Stop Financial (mortgage adviser) recommends budgeting an additional $3,000–$5,000 for these ancillary costs.

Scheme applicability

The First Home Loan has no national house price cap, so it applies regardless of property price — subject to lender borrowing capacity checks. The First Home Grant, however, does have regional caps, which means some higher-priced properties in Auckland may fall outside grant eligibility even if the loan itself is available.

How much is a mortgage repayment on $400,000 NZ?

There is no single answer because repayment amounts depend on your interest rate, loan term, and whether you choose a fixed, floating, or mixed structure. The following figures illustrate the range you might expect at current market rates.

Repayment factors

At a 6% interest rate on a 25-year term, a $400,000 mortgage costs roughly $2,580 per month. At 7%, that rises to approximately $2,812 per month. The Co-operative Bank (participating lender) notes that First Home Loans are available as fixed, floating, or mixed structures, giving you control over rate exposure.

Lenders assess all mortgage applications — including First Home Loans — against their debt-to-income ratio rules. The exact DTI limits are not published by all lenders publicly, but they typically cap total debt repayments as a percentage of gross income. If your other debts (car loans, student loans, credit cards) are significant, your approved repayment amount may be lower than the headline rate would suggest.

Calculator guidance

Use Kāinga Ora’s online calculators or your bank’s affordability tool before applying. These estimate repayments based on current rates, but remember rates change — particularly for floating mortgages — so stress-test your budget against a 2% rate rise. If you can afford the repayments at 8%, you can weather most rate environments.

What are the pros and cons of these schemes?

What steps do I need to take to apply?

1. Check your KiwiSaver status. You need at least three years of membership for the First Home Grant. Log into your KiwiSaver account or contact your provider to confirm your balance and contribution history.
2. Use an affordability calculator. Before approaching Kāinga Ora, run your numbers through your bank’s tool or the Kāinga Ora calculator (government housing agency). Confirm your income is within the caps — $95,000 solo, $150,000 combined — and that your existing debts allow a lender to approve you.
3. Pre-apply through Kāinga Ora. Complete the online pre-approval for the First Home Grant and confirm your eligibility for the First Home Loan. This step is required before you can include grant funds in your offer.
4. Get conditional approval from a participating lender. Approach Kiwibank, Westpac, The Co-operative Bank, SBS, or another participating lender. Bring your Kāinga Ora pre-approval confirmation. The lender will run their own affordability and credit checks.
5. Find a property and make an offer. The property must be your primary residence, on less than 1 hectare, with no major deferred maintenance. Lenders typically allow up to $10,000 in outstanding repairs — confirm this with your specific lender.
6. Finalise with the lender and solicitor. Once your offer is accepted, your lender and solicitor handle the rest. Kāinga Ora pays the First Home Grant into your solicitor’s trust account at settlement.

A First Home Loan can make it easier for you to get into your first home by lowering the required deposit to 5%.

— Kāinga Ora (government housing agency)

Saving for a 20% home deposit can feel like a stretch. The Kāinga Ora First Home Loan enables you to buy with as little as a 5% deposit.

— One Stop Financial (mortgage adviser)

Kāinga Ora has officially updated the income caps and house price limits for the 2026 financial year, effective immediately.

— CK Saksens (financial adviser)

The government has built a genuine safety net for first home buyers — but it is not a gift. Using the First Home Loan to buy with 5% means borrowing more, paying more interest over time, and carrying a higher debt load from day one. For buyers who would otherwise wait years to save $80,000, the scheme delivers real equity at entry — but only if your income comfortably covers the repayments at current or slightly elevated rates. Run the numbers yourself, pre-qualify before you start looking, and treat the deposit gap as just one piece of a much larger affordability picture.

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While Kāinga Ora enables 5% deposits, the now-closed First Home Grant provided up to $10k support with strict eligibility, detailed in this First Home Grant status guide.

Frequently asked questions