Help for First Home Buyers: What’s on Offer?

What help is out there for first home buyers? Canstar explores the incentives and loans on offer for first home buyers in New Zealand.

First home buyers (FHBs) have got it tough. House prices remain sky-high, but all is not lost. There is some assistance available to FHBs.

Canstar explores the First Home Loan and incentives on offer in NZ.

Help for First Home Buyers: What’s on Offer? In this article we cover:

Help for first home buyers: what banks offer

Some mortgage providers offer special deals for first home buyers. So it’s well worth shopping around to find the bank that offers the best deal:


If you buy a first home with an ANZ home loan (minimum of $200,000), you could get a $5000 cash contribution, as long as you keep your mortgage with ANZ for at least three years.


ASB gives FHBs $5000 cash, if they take out a home loan of $200,000 or more.


The SBS’s FirstHome Combo offers a competitive package:

  • Fixed interest rate of 6.14% p.a. (discount of 1%) for the first year. Or, if you’re building, a highly competitive floating rate of 6.19% (discount of 2.55%)
  • $2000 cash to help you move into your new home
  • $1000 towards your home and contents insurance premiums if you take out cover with SBS insurance
  • If you are a member of Lifestages KiwiSaver Scheme, you receive a $1000 deposit into your KiwiSaver account
  • 12 months of free broadband with Pulse Broadband (value of $1,140)

The Co-operative Bank

The Co-operative bank offers a fixed first home buyer special rate of 6.79% p.a. for the first year. A minimum loan of $200,000 and equity of 20% applies.

How much deposit do you need

Currently, the loan-to-value ratio (LVR) restrictions mean that most people buying a first home will need a deposit of at least 20% of the property’s total value. However, lenders are still allowed to lend beyond the LVR of 80% for up to 15% of their mortgages. So that doesn’t mean you must have a 20% deposit to buy a home.

If you’ve a good income and a secure job, and can prove to a lender that you’ve a solid financial head on your shoulders, you could still find a lender willing to grant you a mortgage.

Related article: How Much Deposit Do You Need To Buy A House?

In addition to the continued availability of low-deposit loans, there are some exceptions to the LVR rules, one of these is new builds:

LVR new build exemption

Loans to those building a new home are exempt from the LVR rules. If you buy at an early stage of construction, or buy from a developer within six months of completion, the LVR rules will not apply to your loan application.

Currently, NZ is building a lot of smaller townhouses and apartments. For first home buyers, new homes such as these are a more affordable option, and buying off the plans will exempt you from the LVRs.

Compare home loan rates for free with Canstar!

Help for first home buyers: First Home Loan

The First Home Loan is a financial support program offered by Kāinga Ora. Most lenders currently require a minimum 20% deposit for a home. But with a First Home Loan you only need a 5% deposit. This is because Kāinga Ora underwrites the loan, allowing lenders to provide loans that would otherwise sit outside their lending standards.

However, there are some strict requirements to qualify for a First Home Loan:

  • Income cap – a maximum yearly income of up to $95,000 (before tax) for one person. Or a combined maximum yearly income of up to $150,000 (before tax) for two or more applicants
  • Minimum deposit – a minimum 5% of the purchase price of the house you want to buy
  • You must live in the home you buy – a First Home Loan cannot be used to buy an investment or rental property
  • You need to pay Lender’s Mortgage Insurance (LMI) – this LMI premium is 1% of the loan amount, and is usually added onto your mortgage
  • First home buyers only – or you can be a previous homeowner who is in a similar financial position to a typical first home buyer
  • You must be an NZ citizen – or permanent New Zealand resident or a resident visa holder who is ordinarily resident in New Zealand

Note: The Kāinga Ora First Home Grant was recently ended, however, FHBs are still able to access the First Home Loan.

Help for first home buyers: KiwiSaver Withdrawal

If you’ve contributed to KiwiSaver for at least three years, you’ll be able to withdraw some of your money to help buy a first home. If you’ve a partner who has also been a member of KiwiSaver for at least three years, they can also withdraw their savings to put towards your first home.

You can take out as much as you choose, but you must leave a minimum balance of $1000 in your account. You must also live in the house that you buy for at least six months. It can’t be an investment property.

Help for first home buyers: shared equity

If you are unable to save a deposit to purchase a house outright, shared equity schemes could smooth your path into a first home.

Shared equity schemes are offered by housing associations, such as the New Zealand Housing Foundation and Te Tumu Kāinga.

Note: up until recently, Kāinga Ora was also offering a shared equity program: First Home Partner. However, it has stopped accepting any new applications, due to over demand. Although, hopefully, once it’s worked through its current list of applicants, it will start accepting new clients again.

Shared equity schemes allow you to buy part of a house but live in the whole dwelling. Typically you purchase the majority share of a dwelling, 60% or more, and the housing association purchases the rest of the home. You then have up to around 15 years to purchase to buy out the housing foundation’s share. Usually, most households are able to do this within 10 years of the initial purchase.

Some key points to consider include:

  • The choice of mortgage lenders offering loans for shared equity schemes is limited. Plus applicants often have to pay extra for their mortgages, through Lenders’ Mortgage Insurance. For more info on the subject, check out our story What is Lenders’ Mortgage Insurance and How Does it Work?
  • As with the First Home Loan, price caps apply for homes available under shared equity schemes
  • Although there is no direct fee to pay when using a shared equity scheme, you must pay market value for the housing foundation’s share of your home. So if the price of your home increases by 10%, it will cost that much more to buy out your partner scheme’s share.

Rent to Own

Another type of scheme offered by some housing associations is rent to own. One example of a rent-to-own scheme is offered by The New Zealand Housing Foundation. It is open to first-time home buyers and offers extra opportunity to save for a home deposit.

The scheme provides a home for you to rent, but gives you the option of purchasing the home after you’ve been renting it for five years. You can either buy it outright or use a shared-equity scheme.

One great plus of The New Zealand Housing Foundation’s rent-to-own scheme is that if the home increases in value over the five years you are renting it, the foundation will give you 25% of the property’s uplift in value to put towards your home loan.

You can check out more details about The New Zealand Housing Foundation’s Rent to Own (Homesaver) program here.

How can I get the best mortgage rate?

When it comes to buying a house, it’s important to be realistic about your budget and the true costs of home ownership. And that includes thoroughly researching the best mortgage deals in the market. If you are in the process of saving for a first home, it pays to keep on top of current interest rates. And Canstar is here to help.

The table below displays some of the 2-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.

Compare home loan rates for free with Canstar!

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.

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