The Complete First Home Buyer Guide, New Zealand

If you are reading this, there is a good chance you are somewhere in the middle of working out whether buying your first home is actually possible right now, and what the process even looks like. I get asked some version of this question almost every week, so I have put together the full picture here. Not the marketing version. The version I would actually walk you through in a first conversation.

How much deposit you actually need

Most lenders in New Zealand work off a standard of 20 percent of the purchase price for an owner occupied home. On a 700,000 dollar property that is 140,000 dollars, which understandably stops a lot of people before they even start.

Here is the part most people do not realise. Twenty percent is the standard, not a hard rule. Many first home buyers get into a property with considerably less, sometimes as little as 5 to 10 percent, through a combination of low deposit lending, the First Home Loan scheme, and a bit of structuring around your KiwiSaver. Banks do treat low deposit lending more cautiously, and you will usually pay a slightly higher interest rate or a low equity premium for it, but it is genuinely more achievable than most people assume before they talk to someone.

The honest advice I give every client is this. Do not wait until you have saved the full 20 percent before having a conversation. Have the conversation first, so you actually know what target you are saving toward, rather than guessing.

Using your KiwiSaver for your deposit

If you have been in KiwiSaver for at least three years, you are generally eligible to withdraw most of your balance to put toward your first home. You need to leave a minimum balance of 1,000 dollars in your account, and the withdrawal has to go toward a property you intend to live in, not an investment purchase.

The process itself is administered through your KiwiSaver provider, not your bank, though your bank or adviser will usually help you get the paperwork moving. It typically takes a few weeks to process, so this is not something to leave until the week before you need the funds. I usually suggest starting the withdrawal application once you have an accepted offer, or sometimes earlier if you are confident about your timeline.

A common misconception is that you need to withdraw everything at once or lose it. You do not. You are simply applying to access the funds for this specific purpose, and what you withdraw is entirely up to what you actually need for your deposit and costs.

The First Home Loan and Kainga Ora eligibility

The First Home Loan is a low deposit lending option backed by Kainga Ora, which allows eligible buyers to purchase with as little as 5 percent deposit through a selected group of participating lenders. It is not a loan from the government directly. It is a normal mortgage from a normal bank or lender, with Kainga Ora underwriting some of the risk so the lender is comfortable approving it at a lower deposit.

As of 2026, the key eligibility criteria for the First Home Loan are:

• A minimum 5 percent deposit.
• An income cap of 95,000 dollars for a single buyer, or 150,000 dollars combined for two or more buyers.
• The property must be owner occupied, meaning you intend to live in it yourself.
• You must meet the participating lender's own lending criteria and serviceability requirements, since Kainga Ora backing does not replace a normal assessment.

These thresholds do get reviewed and adjusted over time, so the right move is to check your actual eligibility with me directly, or with Kainga Ora, based on your current income and circumstances.

Getting mortgage pre approval

Pre approval is essentially a bank or lender confirming, in principle, how much they would be willing to lend you, based on your income, expenses, debts, and deposit. It is not a guarantee of final approval, since the actual loan still needs to be assessed against the specific property once you have one under offer, but it gives you a genuine, realistic number to shop with.

This is where I think a lot of first home buyers get the order wrong. They start looking at properties first, fall in love with something, and only then find out what they can actually borrow. It is a much better experience the other way around. Get pre approved first, understand your real budget, and then go looking with confidence rather than guesswork.

To get pre approval moving, you will typically need recent payslips or proof of income, a summary of your regular expenses and debts, proof of your deposit or savings, and identification. Pre approval usually lasts around 60 to 90 days depending on the lender, so timing it reasonably close to when you plan to actively search is worthwhile.

House hunting with a real budget

Once you know your number, house hunting becomes a much calmer process. A few practical things I tell clients at this stage. Budget for costs beyond the purchase price itself, including legal fees, building inspections, and moving costs, so you are not caught short right at the point you need cash the most. Be realistic about what your pre approval actually covers once rates, insurance, and other homeownership costs are factored in, not just the mortgage repayment in isolation.

It is also worth thinking now about whether you want a building inspection and a LIM report as standard conditions on any offer you make. Most buyers do, and for good reason. These are two of the more common places where a first home buyer can end up with an unpleasant surprise after settlement if they are skipped.

Understanding the Sale and Purchase Agreement

Once you find a property and want to make an offer, that offer is formalised through a Sale and Purchase Agreement, usually prepared by the real estate agent. This document sets out the price, the conditions of the offer, and the settlement date.

Almost every first home purchase should go in conditional, not unconditional, meaning the offer is subject to a list of conditions being satisfied before it becomes binding. The conditions I see most often include finance approval, a satisfactory building inspection, a LIM report review, and your solicitor's approval of the title and agreement itself. Each of these protects you, and each one has a deadline attached to it in the agreement, so it genuinely pays to have your mortgage adviser and your solicitor lined up and ready to move before you make an offer, not after.

Going unconditional, what it actually means

Going unconditional means all the conditions in your Sale and Purchase Agreement have been satisfied or waived, and the agreement is now binding. This is the point of no return in a purchase, so it should only happen once finance is properly confirmed, the building inspection and LIM have come back acceptable, and your solicitor has signed off.

On the lending side, this is usually where I sit down with clients to properly structure the loan itself, not just confirm the amount. This includes decisions like how much to fix versus leave floating, what loan term makes sense, and how your accounts and repayments are set up. This structuring step matters more than people expect, since it affects your flexibility and total interest cost for years to come, not just at settlement.

Settlement day

Settlement is the day ownership actually transfers to you. In the lead up, your solicitor and lender coordinate to make sure all the required documents are signed, your property insurance is in place from settlement day (lenders will not release funds without this), and the final funds are ready to transfer.

On settlement day itself, the lender transfers the loan funds to your solicitor, who completes the purchase with the seller's solicitor. Once that is confirmed, you get the call that it is done, and you can collect the keys. It is usually a quieter day than people expect after everything leading up to it, since most of the real work has already happened in the weeks before.

What happens after settlement matters too, and it is something I do not think gets talked about enough. Your mortgage does not just run itself for the next 30 years. I stay in touch with clients well past settlement, checking in when fixed terms are coming up for renewal, and helping with things like top ups or restructures as life changes. Settlement is the start of the relationship, not the end of it.

Common mistakes I see first home buyers make

• Looking at properties before getting pre approved. It leads to disappointment and wasted time on homes you were never going to be able to buy.
• Spending every dollar on the deposit and leaving nothing for costs. Legal fees, building inspections, moving costs, and those first few weeks of unexpected home ownership expenses all add up.
• Taking on new debt right before settlement. A new car loan or a big increase in credit card spending between pre approval and settlement can genuinely affect final approval. Keep your financial situation steady until the keys are in your hand.
• Fixing the entire mortgage on one term without thinking it through. It can leave you with less flexibility than a split structure would have given you.
• Skipping the building inspection to make an offer more competitive. It can save a small amount upfront and cost a great deal more later.
• Never reviewing the mortgage again after settlement. Rates, your income, and your goals all change over time, and your loan structure should be revisited accordingly.

A few honest tips

Talk to a mortgage adviser before you talk to a bank directly. It costs you nothing, and it means someone is comparing options across multiple lenders on your behalf rather than only presenting you with what one bank has to offer.

Get your documents organised early. Payslips, ID, bank statements, and proof of savings history all get requested at some point, so having them ready speeds up every stage of the process considerably.

Ask questions, even ones that feel basic. I would genuinely rather explain something twice than have a client feel unsure about a decision this significant.

Frequently asked questions