The First Home Loan is the main remaining low-deposit pathway for eligible New Zealand buyers after the First Home Grant closed. It is not free money and it is not automatic approval. It is a lending structure that lets qualifying buyers purchase with a 5% deposit through participating lenders, with Kāinga Ora settings in the background.
What you get
Eligible buyers can proceed with a 5%deposit. First Home Loans are generally treated as exempt from the Reserve Bank's standard LVR speed limits and DTI restrictions that apply to other high-LVR lending — which is why this pathway exists alongside ordinary bank lending rather than as a minor variant of it.
Income caps
Income caps apply: $95,000 for a single buyer with no dependants, and $150,000 for a single buyer with dependants or for two or more buyers combined. Caps change over time; always check Kāinga Ora for the figure that applies when you apply.
Lender's mortgage insurance
Low-deposit lending carries more risk for the lender. A Lender's Mortgage Insurance (LMI) premium is part of the First Home Loan structure. It is a real cost — sometimes capitalised into the loan — and it should sit in your spreadsheet next to the smaller deposit. See Kāinga Ora for current premium information.
Eligibility is more than the income cap
The income test gets the attention, but it is not the only gate. You must be buying a home to live in rather than to rent out, and you generally need to be a New Zealand citizen, permanent resident or resident visa holder ordinarily living here. Previous owners are not automatically excluded: someone who has owned before may still qualify if their financial position is comparable to a first-home buyer, assessed individually. And the loan is still a loan — you have to satisfy the lender's own credit and serviceability tests, which the Kāinga Ora settings do not soften.
You apply through a lender, not to Kāinga Ora
Only participating lenders can write these loans, and the list is shorter than the list of banks. You apply to the lender in the ordinary way and they assess you against both their criteria and the scheme's. This has a practical consequence worth planning around: if your usual bank does not participate, shopping this pathway means opening a relationship with a different institution, which takes longer than a conversation with the bank that already holds your accounts. Start that early rather than during a finance condition.
Not the same as the First Home Grant
The First Home Grant closed to new applications on 22 May 2024 and has no replacement. Do not budget for a grant. The loan pathway is separate and still operating for those who meet its tests.
How to use FinLab with this pathway
Set the deposit planner toward a 5% target and see whether KiwiSaver plus cash closes the gap. Then open the borrowing and mortgage tools to test repayments on the larger loan that a tiny deposit implies. A smaller deposit always means a larger loan and more interest over time — even when the pathway is available.