Buying your first home is the largest financial transaction most New Zealanders will ever make. The deposit and mortgage get most of the attention, but there are dozens of other financial decisions, costs, and obligations that catch first home buyers by surprise.
First home buyers in NZ need a minimum 5% deposit (with LVR exemption) and ideally 20%. Budget $5,000–$10,000 in additional purchase costs on top of your deposit (legal fees, building inspection, LIM, valuation). KiwiSaver withdrawal requires 3+ years in the scheme and leaves $1,000 in your account.
The Deposit — How Much Do You Need?
Standard LVR rules
The Reserve Bank of New Zealand (RBNZ) sets Loan-to-Value Ratio (LVR) restrictions that affect how much banks can lend.
| Deposit | LVR | Notes |
|---|---|---|
| 5% | 95% LVR | Available for first home buyers under RBNZ exemptions — not all banks offer this; higher interest rate |
| 10% | 90% LVR | Accessible for first home buyers; some banks add a low-equity margin to the rate |
| 20% | 80% LVR | Standard lending; no low-equity margin; best interest rates |
First home buyer LVR exemption: A portion of bank lending can be made to first home buyers with less than 20% deposit. Not all lenders offer this to every borrower — your income, credit history, and property type affect eligibility.
Genuine savings
Most lenders want to see at least 3–6 months of genuine savings history. KiwiSaver funds and windfalls alone are often not sufficient — banks want to see you can save consistently.
KiwiSaver First Home Withdrawal
If you’ve been in KiwiSaver for 3 or more years, you may be able to withdraw most of your balance to help buy your first home.
Eligibility requirements
- Must have been a KiwiSaver member for at least 3 years
- Must be buying your first home (or qualify under the “second chance” criteria if you once owned but no longer do)
- Must intend to live in the home (not investment property)
- Property must be in New Zealand
What you can withdraw
- All your balance, including your contributions, employer contributions, and returns
- Except: You must leave a minimum of $1,000 in your KiwiSaver account
How to apply
- Get a KiwiSaver first home withdrawal application from your KiwiSaver provider
- Get a solicitor’s certificate (your lawyer prepares this)
- Submit at least 10 working days before settlement — timing is critical
Important: The withdrawal goes directly to your solicitor’s trust account at settlement — not to your personal bank account.
Costs Beyond the Purchase Price
Most first home buyers focus on the purchase price and deposit. The additional costs are substantial and must be budgeted for separately — they cannot be added to your mortgage.
| Cost | Estimated Range |
|---|---|
| Legal fees (conveyancing) | $1,500 – $3,000 |
| Building inspection | $500 – $800 |
| LIM report (Land Information Memorandum) | $200 – $400 |
| Registered valuation (if required by bank) | $600 – $900 |
| Loan application / establishment fee | $0 – $500 |
| Moving costs | $500 – $3,000 |
| Immediate maintenance / urgent repairs | $500 – $5,000+ |
| Furnishings and appliances | $2,000 – $15,000 |
| Total additional costs | $5,800 – $33,000+ |
Budget at minimum $8,000–$10,000 in purchase costs beyond your deposit.
Do not skip the building inspection
A building inspection costs $500–$800 and can reveal issues worth tens of thousands to fix. Always get one, even for new builds. Even if the vendor has supplied one — get your own.
LIM report
A LIM (Land Information Memorandum) from the local council reveals consents, unconsented work, drainage information, and whether the property is in a flood zone or special character zone. Essential in NZ where unconsented work is common.
Pre-Approval — Getting Finance Ready
Why pre-approval matters
A pre-approval (conditional approval) tells you:
- How much a bank is willing to lend you
- That your financial position meets their lending criteria
- That you can bid at auction or make unconditional offers with confidence
Pre-approval typically lasts 60–90 days and must be renewed if you haven’t found a property.
What banks assess
- Income: Salary, self-employment income, rental income (at a haircut)
- Expenses: Living costs, existing debt repayments, credit card limits (not just balances)
- Credit history: Credit score, payment defaults, number of credit applications
- Deposit source: Genuine savings, KiwiSaver, gift from family (often accepted but may require a letter)
Mortgage broker vs bank direct
A mortgage broker can access multiple lenders and often negotiates better rates than applying direct. Brokers are paid by the lender — no cost to you. Consider using one if your situation is non-standard (self-employed, variable income, lower deposit).
Kāinga Ora — First Home Loan and Grants
First Home Loan
A government-backed loan product allowing eligible first home buyers to borrow with a 5% deposit. Available through selected lenders (ASB, ANZ, Westpac, Kiwibank, and others).
Eligibility: Income caps apply ($95,000 for single buyers, $150,000 for two or more buyers as at 2026 — check kaingaora.govt.nz for current caps). Property price caps also apply by region.
First Home Grant
The First Home Grant provides up to $10,000 per person (for existing homes) or $20,000 per person (for new builds) to eligible KiwiSaver members.
Eligibility:
- 3+ years in KiwiSaver
- Income below the cap
- Property below the regional price cap
- First home buyer (or eligible second-chance buyer)
Apply via Kāinga Ora before you make an offer or bid at auction.
Settlement Day — What Happens Financially
On settlement day:
- Your lawyer transfers the purchase funds (deposit + mortgage drawdown) to the vendor’s lawyer
- KiwiSaver withdrawal (if applicable) arrives in your lawyer’s trust account
- First Home Grant (if applicable) arrives in your lawyer’s trust account
- Once funds confirmed, the property transfers to your name
- You receive the keys
Home insurance — required before settlement
Your bank will require evidence of home insurance from settlement day. Arrange home insurance before settlement — ideally a day or two before — and provide the policy number to your lawyer. You cannot settle without it.
Ongoing Ownership Budget
The true cost of homeownership goes beyond the mortgage. Budget for these ongoing costs:
| Expense | Frequency | Estimate |
|---|---|---|
| Mortgage repayments | Weekly/fortnightly | Depends on your loan |
| Rates | Quarterly or annually | $2,000 – $5,000/year (varies by council and property value) |
| Home insurance | Annually | $1,200 – $3,000/year |
| Contents insurance | Annually | $400 – $1,200/year |
| Maintenance | As needed | Budget 1% of home value per year |
| Utilities | Monthly | $150 – $400/month |
| Body corporate fees (if apartment/townhouse) | Quarterly or annually | $2,000 – $10,000+/year |
The 1% maintenance rule: Budget approximately 1% of your home’s value per year for maintenance (e.g., a $700,000 home = $7,000/year). This covers paint, appliances, plumbing, gutters, and periodic larger repairs. Most years you’ll spend less; some years, significantly more.
Financial Checklist — Buying Your First Home
12+ months before buying
- Check KiwiSaver balance and eligibility for first home withdrawal (3-year minimum)
- Check First Home Grant eligibility via Kāinga Ora
- Build genuine savings history — regular transfers to savings account each pay
- Check credit report (get a free copy from Centrix or Equifax NZ)
- Pay down credit card debt and reduce credit limits (high limits reduce your borrowing capacity)
- Research house prices in your target suburb/region
3–6 months before buying
- Get mortgage pre-approval from a bank or broker
- Budget your total purchase costs (not just deposit — include all costs above)
- Apply for Kāinga Ora First Home Grant early (can take time to process)
- Engage a lawyer/solicitor (get referrals and confirm they handle conveyancing)
During house-hunting
- Attend auctions and open homes to understand the market
- Never skip the building inspection — even if market is competitive
- Always get a LIM report before going unconditional
- Confirm your pre-approval is still current (expires every 60–90 days)
Once offer is accepted
- Apply for KiwiSaver first home withdrawal immediately (10 working days minimum lead time)
- Arrange home insurance — required for settlement
- Keep your finances stable (no new debt, no job changes) until after settlement
After settlement
- Update your IRD address (myIR)
- Update your electoral roll address (enrol.vote.nz)
- Notify all banks, insurers, and subscriptions of new address
- Register for rates notices with your local council
Next Steps
- Check your KiwiSaver balance and confirm you’ve been a member for 3+ years — if not, your countdown has started
- Check your credit report for free via Centrix or Equifax NZ — fix any errors before applying for a mortgage
- Get pre-approval — you can’t make serious offers without it, and the process reveals what you can actually afford
- Budget your full purchase costs — deposits + at minimum $8,000 in additional costs
See also: Life Events hub · Mortgages hub · KiwiSaver first home withdrawal · Banking comparisons