First-home rules

You cannot withdraw your whole KiwiSaver balance. At least $1,000 must stay in the account — a rule that exists to keep you a member of the scheme rather than emptying and effectively exiting it.

The amount is small enough that most people shrug at it, and then it bites at the worst possible moment. If your balance is $48,000, your withdrawable figure is not $48,000 — it is $47,000. Deposit arithmetic done on the raw balance shown in your provider's app will be over by exactly this amount, and people discover it in the week they are trying to go unconditional.

Certain amounts are also excluded from withdrawal entirely: Amounts transferred from an Australian complying superannuation scheme; Government contributions received while living overseas without NZ permanent residence. These sit on top of the retained balance, so the gap between what your app displays and what you can actually put towards a house can be larger than the $1,000 alone suggests.

The only reliable figure is the one your provider gives you in writing. Request it early — processing takes time, and providers do not release funds directly to you. Our first-home deposit planner applies the retained balance and exclusions automatically so the number you plan against is the withdrawable one.

Eligibility turns on how long you have been a member — at least 3 years — not on how much you have contributed. Someone who joined at eighteen, contributed almost nothing for years, and only recently started earning properly still qualifies on the membership test.

This makes joining KiwiSaver an unusually cheap option to buy. Even a minimal balance starts the membership clock, and the clock is the part that cannot be accelerated later with money. Anyone who might buy a house in the next several years and is not yet a member is losing optionality every month they wait.

Each buyer is assessed separately through their own provider. A couple where one partner has met the membership test and the other has not can still proceed — the eligible partner withdraws, the other does not. Both must intend to live in the property; the withdrawal is not available for an investment purchase.

Having owned property before does not automatically disqualify you. Kāinga Ora runs a second-chance assessment for previous owners whose financial position is comparable to a first-home buyer's — worth pursuing rather than assuming you are out.

A First Home Loan lets you buy with 5% down instead of the 20%that conventional lending effectively expects. It works because Kāinga Ora underwrites part of the lender's risk, and because the loans are exempt from both LVR and DTI restrictions.

The cost is a lender's mortgage insurance premium, charged on top of the loan. That premium protects the lender, not you, and it is usually capitalised into the balance — so you borrow it and pay interest on it for the life of the loan. Check the current rate directly with Kāinga Ora; we deliberately do not quote a figure here because it has changed and we will not risk publishing a stale one.

Income caps apply: $95,000 for a single buyer with no dependants, and $150,000 otherwise. There are no national house price caps. Participating lenders are a limited set rather than every bank, so your existing bank may not offer it.

The honest trade-off is this: a smaller deposit means a larger loan, higher repayments, more total interest, and less equity buffer if prices fall. Buying sooner can still be the right call — rent is not free either, and waiting has its own costs — but it should be a decision made with the full repayment figure in front of you rather than on deposit arithmetic alone. Run the numbers through our repayment calculator before committing.

The First Home Grant closed to new applications on 22 May 2024. It previously offered up to $10,000 per buyer towards a first home, and a great deal of advice still circulating online assumes it exists.

If you are working from a budget spreadsheet, a mortgage broker's worksheet, or a blog post written before that date, check whether it includes grant money. For a couple the assumption could be overstating available deposit by a five-figure sum. The KiwiSaver withdrawal and the First Home Loan both continue — it is only the grant that ended.