Your first house, without the bank's defaults.
KiwiSaver withdrawal, Kāinga Ora First Home Loan, deposit shaping, conditional offers, self-employed lending. The first-home journey has six or seven decision points and the bank's default answer is rarely the right one for you.
TL;DR
First-home buyers in NZ have more support than they realise (KiwiSaver First Home Withdrawal, Kāinga Ora First Home Loan, low-deposit lending) and more landmines than they realise (sequencing errors, conditional drops they shouldn't have made, lender mismatches). The job is to map the whole journey from KiwiSaver to keys in one conversation, then run it in the right order.
- Deposit: 5 percent is enough through the Kāinga Ora First Home Loan scheme. 10 percent opens up more lenders. 20 percent removes the low-equity premium entirely.
- KiwiSaver withdrawal: almost your whole balance, less $1,000, if you have been a member for three years and the home will be your main residence.
- The First Home Grant ended in 2024. What remains is the KiwiSaver withdrawal and the First Home Loan scheme. Both are still very much in play.
The first-home journey trips most people up in three places.
One: order of operations. Most first-home buyers start by looking at houses on TradeMe, then panic when they like one. The right sequence is the opposite. Pre-approval first, KiwiSaver provider notified next, conditional offer template understood, then houses. We have seen buyers lose deposits because they signed an unconditional offer assuming finance would come together, and it did not. Order matters more than people think.
Two: confusing the schemes. The KiwiSaver First Home Withdrawal and the Kāinga Ora First Home Loan are two completely different things. The first is your own money, coming out of your retirement account, to use as deposit. The second is a government-underwritten loan that lets you borrow with 5 percent deposit. You can use both at the same time. Many buyers conflate them or assume they only qualify for one.
Three: the bank-direct trap. Walking into your own bank for a first-home pre-approval feels safer than going to a broker. It is rarely the better outcome. Your bank sees your everyday spending, your overdraft history, your occasional credit card overrun. A broker sees those same things but presents them with context, and shops the application around to whichever lender will treat the picture most generously. Same applicant, different yes.
KiwiSaver First Home Withdrawal, in detail.
The mistake we see most often is not the amount, it's the timing of when you notify your provider and when the funds land.
Eligibility
You can withdraw your KiwiSaver balance for a first home if you have been a contributing member for at least three years, the property will be your main residence (not a rental), and the home is in New Zealand. Previous home owners can still apply if Kāinga Ora considers them in a similar financial position to a first-home buyer. We confirm eligibility on the official IRD and Kāinga Ora guidance before any application.
How much can come out
Almost all of your balance, less $1,000 that must remain in the account to keep it open. Your provider may also retain some or all of the government contribution, depending on their rules. Employer contributions and your own contributions come out in full.
Timing
This is where most first-home buyers get caught. KiwiSaver withdrawals are not instant. Most providers want a fully signed sale and purchase agreement, solicitor confirmation, and processing time of around 10 to 15 working days from request to funds in your solicitor's trust account. You need to factor this into your settlement date when you negotiate the contract. Asking your provider for a withdrawal three days before settlement is too late.
What it counts as
For deposit purposes, your KiwiSaver withdrawal counts as cash deposit. Lenders treat it the same as savings in the bank. It can be combined with savings, gifted deposit from family, and the Kāinga Ora First Home Loan scheme. There is no penalty for using it on a first home, but you only get to do it once.
Kāinga Ora First Home Loan scheme.
A government-underwritten loan that lets eligible buyers purchase with 5 percent deposit, through participating lenders.
How it works
The scheme is run by Kāinga Ora and delivered through a small panel of participating lenders. Kāinga Ora underwrites the portion of the loan that sits above the normal 80 percent LVR threshold, which removes the low-equity premium fees you would usually pay on a high-LVR loan. You apply through the lender, but the underwrite is the government's.
Deposit requirement
5 percent of the purchase price. So on a $700,000 house, the minimum deposit is $35,000. That deposit can come from KiwiSaver withdrawal, savings, gifted family deposit, or a combination.
Income caps
The scheme has income caps that are reviewed periodically by Kāinga Ora. As a general guide, single applicants have a cap and joint applicants have a higher combined cap. Both figures are higher than the median household income in most regions and are designed to cover working professionals. Current caps are on the Kāinga Ora website and we check live figures on every application. [TBC: confirm current 2026 cap figures with Craig at sign-off.]
House-price caps by region
Maximum purchase prices are set by region, also reviewed periodically. Auckland is the highest cap, followed by Wellington, then Tauranga and other main centres, then the rest of New Zealand. For Tauranga, the cap is typically a six-figure step below Auckland and reflects current median sale prices in the area. [TBC: confirm current Tauranga cap with Craig.]
What this scheme does for you
Three things. First, it lets you buy earlier, because you do not have to wait until you have saved 20 percent. Second, it avoids the low-equity premium charges that most lenders apply to 90 or 95 percent LVR loans. Third, it means more lenders will look at you, because Kāinga Ora is taking a slice of the risk.
Deposit shaping.
Where your deposit comes from matters almost as much as how much it is.
Your own savings
The lender's preferred source. A pattern of regular saving over 6 to 12 months tells the credit team you can budget. Lump sums that appear shortly before application without explanation get flagged.
KiwiSaver withdrawal
Counted as cash. No special treatment, no penalty. The only constraint is the 10 to 15 working day processing time, which you build into your settlement date.
Gifted deposit from family
Acceptable to most lenders if it is a genuine gift (not a loan), evidenced by a signed gift letter from the donor, and seasoned in your account for a short period. Watch for tax implications on the donor's side.
Family loan / parental guarantor
A small number of lenders accept family loan structures or guarantor arrangements. The most common is a parental guarantee secured against the parents' own home equity. Useful where parental cash is tied up.
Conditional offers: what to put in, what never to drop.
A conditional offer is the sale and purchase agreement form that depends on certain conditions being satisfied before it becomes binding. Auctions are unconditional by definition, which is why first-home buyers should usually avoid them or attend with finance fully unconditional in advance. For everything else, the conditions you include are your protection.
Standard conditions we include
- Finance condition. Allows you to walk away if your lender does not confirm the loan. Always include unless you have a written unconditional approval against the specific property already.
- Builder's report condition. Allows your inspector to find structural, weather-tightness or other physical issues. Worth the few hundred dollars on every purchase. The number of leaky building disasters this prevents is the case for it alone.
- LIM (Land Information Memorandum) condition. Council file on the property. Picks up consent issues, hazard zones, unconsented work. Often handled by your solicitor as part of due diligence.
- Solicitor's review condition. A general clause that lets your lawyer raise any title or legal issue before the offer goes unconditional.
What never to drop without advice
If a real estate agent or vendor asks you to drop a condition to "make the offer stronger", talk to us before you do. Dropping finance is almost never worth it. Dropping the builder's report on a property under 15 years old can be defensible. Dropping it on a 1960s or 1970s house is a poor risk. The "competitive offer" framing exists to push you into a risk you may not understand.
Self-employed first-home buyers.
Self-employed buyers face a tougher first-home journey because lenders treat self-employed income with more caution. The standard requirement is two full years of financial statements showing stable or growing income, plus the most recent IRD assessment. Contractors are often treated similarly to self-employed, particularly if they are sole-trader contractors on a 90-day contract structure.
The mistake most self-employed first-home buyers make is presenting their financials without context. If your accountant has aggressively minimised your taxable income for IRD purposes, the lender sees the low taxable income and assumes that is your real earning capacity. We work with your accountant before submission to add-back legitimate non-cash items (depreciation, owner drawings, motor vehicle expenses) so the lender sees the real picture, in a way the lender can accept.
The Kāinga Ora First Home Loan scheme accepts self-employed applicants. The income test still applies, and the two-year history requirement is still in play, but the 5 percent deposit threshold and the absence of the low-equity premium remain available.
Want Craig to map your first-home journey?
15 minutes, no pitch. He'll tell you what you can borrow, what schemes you qualify for, and what to do this week to move forward.
First-home questions we get every week.
How much KiwiSaver can I withdraw for a first home in NZ?
Almost all of your KiwiSaver balance, less a minimum $1,000 that must stay in the account, provided you have been a member for at least three years and the property will be your main home. Government contribution amounts may be retained by the provider depending on your provider's rules.
What is the Kāinga Ora First Home Loan deposit requirement?
Five percent of the purchase price. The loan is underwritten by participating lenders with a Kāinga Ora underwrite, which lets you borrow above the usual 80 percent LVR threshold without paying low-equity premium fees in the same way. Income and house-price caps apply.
Can I use the First Home Grant in 2026?
The First Home Grant was discontinued in 2024 and is no longer available. The KiwiSaver First Home Withdrawal and the Kāinga Ora First Home Loan scheme are both still in place.
What income caps apply to the First Home Loan scheme?
Income caps are set by Kāinga Ora and updated periodically. As a guide, single applicants and joint applicants have separate caps. Current caps and house-price caps by region are published on the Kāinga Ora website and we check the live figures for every application.
Can self-employed contractors buy a first home with a 5 percent deposit?
Yes, in many cases. The Kāinga Ora First Home Loan scheme accepts self-employed applicants who can show stable income, usually with two years of financial statements. The application presentation matters significantly: we work through how the income is shown to the lender before submission.
How long does a first-home mortgage approval take?
Pre-approval typically takes one to two weeks from a complete application. Full approval against a specific property usually takes another five to ten working days once the sale and purchase agreement and valuation are in. Tight conditional periods need planning.
What is a conditional offer and what conditions should I include?
A conditional offer is a sale and purchase agreement that depends on certain conditions being satisfied before it becomes unconditional. For first-home buyers we typically include finance, builder's report, LIM, and a solicitor's review condition. Each condition exists to protect you from being locked into a purchase you cannot complete.
Do I need a 20 percent deposit to buy a first home?
No. Most main banks will lend above 80 percent LVR for first-home buyers in approved categories, subject to Reserve Bank speed limits and low-equity premium charges. The Kāinga Ora First Home Loan scheme reduces the deposit requirement to 5 percent in many cases.
Should I get pre-approval before I start looking at houses?
Always. Pre-approval gives you a real number to shop with, confidence to make an offer, and a 60 to 90 day window inside which conditional offers can be made with finance condition tied to your existing approval. Looking at houses without pre-approval is window-shopping and slows the whole process down.
Sources cited or referenced on this page include the Inland Revenue Department (IRD) guidance on KiwiSaver First Home Withdrawals, the Kāinga Ora First Home Loan scheme criteria, Reserve Bank of New Zealand LVR speed limit rules, and Sorted.org.nz first-home buyer resources. Figures and caps should be verified at point of application as they are reviewed periodically.