First home buyer

Buying your first home is an exciting and overwhelming experience, but with the right information, resources, and support, it can be a successful and enjoyable process.

It's important for first home buyers to consider their affordability, deposit requirements, and the different types of interest rates available, and choose the option that best suits their financial circumstances and goals. First home buyers may also want to consider getting pre-approval for a loan, so they have a clear understanding of their borrowing capacity and can move quickly when they find the right property.

KiwiSaver is a government-sponsored savings scheme that can be used towards a first home purchase in New Zealand. First home buyers may also be eligible for the First Home Grant, which provides financial assistance towards the purchase of a first home.

How much can I borrow?

Work out how much you might be able to borrow based on your income and expenses.

Know your repayments

Work out how much your mortgage repayments could be.

Pre-approval Process

This process involves exactly the same steps as you were to apply for a loan except there is no property involved at this stage. Getting a pre-approval from a lender will help you understand how much you can borrow and what sort of properties you can look for. You will know exactly how much you can afford to spend on your first home. Having a pre-approval will give you peace of mind while you are searching for your home.

Pre-approval is a process where a lender evaluates a potential borrower’s financial situation and provides an estimate of the amount they can borrow. This can help first home buyers get a better understanding of their borrowing capacity and make the process of buying a home easier and more streamlined.

The pre-approval process typically involves the following steps:

Gather your financial information

This includes your income, expenses, and any debts you may have. You will need to provide this information to the lender or mortgage adviser in order to get pre-approved.

Choose a lender

There are a number of lenders including banks and non-bank lenders. A financial adviser will provide you with a comparison of the products and services in the lending market in order to find the one that best suits your needs. Your mortgage adviser will also assist you with your loan application.


After your financial adviser submitted your loan application, the lender will review your application and assess your financial situation to determine the amount you can borrow and the interest rate you will be offered.


If your application is approved, the lender will provide you with a pre-approval offer, which outlines the amount you have been approved to borrow.

Validity period

Pre-approval is usually valid for a specific period, typically 2-3 months, during which time you can find the right property.

It’s important to note that pre-approval does not guarantee loan approval, as the lender will still need to assess the property you are interested in purchasing. However, it does give you a clearer understanding of your borrowing capacity and can help make the process of buying a home smoother and less stressful.

Save as Much as You Can

Having a larger deposit can help you avoid additional costs like lenders' mortgage insurance/Low Equity Margin and a higher interest rate.

Additionally, having a larger deposit can give you a better loan-to-value ratio (LVR), which is the ratio of the loan amount to the value of the property. A lower LVR can indicate to lenders that you have a lower risk profile, making it easier for you to secure a loan with better terms and interest rates.

Saving for a larger deposit takes time and discipline, but it can be worth it in the long run. Consider setting a budget, reducing your expenses, and finding ways to increase your income. You can also consider using a high-interest savings account, term deposits, or other investment options to grow your savings.

By making smart financial decisions and taking a proactive approach to saving, you can work towards your goal of purchasing a home and achieving long-term financial stability.

It's always a good idea to seek advice from a financial adviser to help you make informed decisions about your finances and the home-buying process.

KiwiSaver Withdrawal

For first home buyers, KiwiSaver can be a helpful tool in saving for a deposit on a home. If you have been a member of KiwiSaver for at least three years, you may be eligible to withdraw your savings (excluding the $1,000 kick-start) to put towards the purchase of your first home. You will need to provide proof that you are purchasing a home, such as a conditional sale and purchase agreement. Additionally, there may be restrictions on the value of the home you can purchase and the amount you can withdraw. It is advisable to seek financial advice and check with your KiwiSaver provider for more information on the specific requirements and processes for withdrawing your funds for a first home purchase.

First Home Grant

The First Home Grant is a government initiative aimed at assisting first home buyers to get into their first home. The grant provides eligible first home buyers with a one-off payment up to $10,000 to put towards the purchase of an existing home or the construction of a new home. To be eligible for the grant, applicants must:

  • Be at least 18 years old.
  • Be a permanent resident or citizen of New Zealand.
  • Have never owned a home before (or have only owned a home with a former partner as part of a relationship break-up).
  • Have a combined income of less than $95,000 per year for a single person or less than $150,000 per year for a couple.
  • Intend to live in the home for at least 6 months of the first year after purchase or construction.

It's important to note that the eligibility criteria and the amount of the grant may change, so it's best to check with the government's official website or consult with a financial adviser for the most up-to-date information.

Important information and disclaimer

  • Any advice on this publication is of a general nature only and has not been tailored to your specific circumstances. Before taking action on this information, please seek your personal advice. Past performance is not a reliable guide for future returns. The information on this page reflects our understanding of the existing legislation, standards, etc.

    In some cases, the information has been provided to us by third parties. While the information is believed to be accurate and reliable, but this is not guaranteed in any way.

  • Neither AIFP nor its responsible persons or employees give any warranty of accuracy, nor accept any responsibility for errors or omissions in the information provided on this page.