Buying your first home in New Zealand is one of the most exciting and significant financial decisions you will ever make. It can also feel overwhelming, especially if you are navigating the process for the first time. This guide covers the key steps and options available to help you get on the property ladder with confidence.
Understanding Your Borrowing Power
Before you start browsing listings, it is important to know how much you can actually afford. Your borrowing power depends on several factors:
- Income: Your gross salary or combined household income
- Existing debts: Credit cards, personal loans, car finance, student loans
- Living expenses: The bank will assess your regular outgoings
- Deposit amount: How much you have saved, including KiwiSaver
A mortgage adviser can assess your full financial picture and give you a clear borrowing estimate, often within a day or two.
Using Your KiwiSaver for a First Home
If you have been contributing to KiwiSaver for at least three years, you can withdraw most of your balance to put towards your first home. You must keep a minimum of $1,000 in your account, but the rest can go directly towards your deposit.
To make a KiwiSaver withdrawal, you need to:
- Have been a KiwiSaver member for at least three years
- Be purchasing your first home (or be in an equivalent financial position)
- Intend to live in the property
Your mortgage adviser can guide you through the withdrawal process and ensure the timing aligns with your purchase.
Getting Pre-Approved
Pre-approval is one of the most valuable steps in your home buying journey. It gives you a conditional commitment from a lender for a specific amount, so you know your budget before making an offer.
Pre-approval typically lasts 60 to 90 days and involves the lender reviewing your income, expenses, and credit history. Having pre-approval in place makes you a more attractive buyer to vendors and real estate agents.
Low-Deposit Lending Options
While a 20% deposit is the standard requirement, there are pathways for buyers with less saved:
- Kainga Ora First Home Loans: Available for buyers with as little as 5% deposit who meet income and house price criteria
- Welcome Home Loans: Government-backed loans for eligible first home buyers
- Low-equity premiums: Some banks will lend with 10-15% deposit, though you may pay a small premium on your interest rate
An experienced mortgage adviser can help you understand which option suits your situation best.
Tips for First Home Buyers
- Start saving early and set up automatic transfers to a dedicated savings account
- Get financial advice before you start looking at properties
- Factor in additional costs such as legal fees, building inspections, insurance, and moving expenses
- Be flexible on location as you may find better value in neighbouring suburbs
- Do not skip the building inspection, even for newer properties
- Work with a mortgage adviser who can compare options across multiple lenders at no cost to you
Ready to Take the First Step?
At Sunshine Mortgages, we specialise in helping first home buyers navigate the lending process. Our service is completely free, and we compare options across 20+ lenders to find the best deal for your situation. Book a free consultation with one of our experienced advisers today.