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

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

It’s never been more difficult to buy a first home: house prices are through the roof; changes to the LVR rules have curtailed low-deposit loans; plus new responsible lending legislation means that banks are going through mortgage applications with a fine toothcomb. But don’t despair, there is some help out there for first home buyers.

Canstar explores the first home buyer grants 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, you could get $3000 cash back, as long as you keep your mortgage with ANZ for at least three years.


ASB gives FHBs $3000 cash, if they take out a home loan of $250,000 or more.


Kiwibank’s First Home Saver is a savings and home loan bundle that offers special deals and incentives for saving for your first home. If you save regularly for six months, you are eligible for:

  • Interest rate of 1.5% p.a. (90 days notice)
  • $2000 towards your first home expenses when you draw down your home loan
  • Discounted home loan rates: 0.25% p.a. off Kiwibank’s standard fixed home loan rate


The SBS’s FirstHome Combo offers a competitive package:

  • Competitive FHB one-year fixed rate of 2.29% or 2.24% floating
  • $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
  • SBS Visa Credit Card, including interest free for 24 months on a single transfer of up to $2000
  • If you are a member of Lifestages KiwiSaver Scheme, you receive a $1000 deposit into your KiwiSaver account


first home buyer

How much deposit do you need

Most people buying a first home will need a deposit of at least 20% of the property’s total value. Recently, the Reserve Bank clamped down on its loan-to-value ratio (LVR) restrictions, cutting the amount of lending banks can do to those with a small deposit.

Now, those with deposits of less than 20% can only make up 10% of all new loans to owner-occupiers, down from the previous figure of 20%.

This means that if you’d planned on buying a property with a 10% deposit, you might now need to save a 20% deposit. However, even with LVRs in place, banks and lenders are still able to process low-deposit home loans.

Although some banks have curtailed their low-deposit lending for the moment, it doesn’t mean that low-deposit mortgages are going to disappear altogether. All the new restrictions have done is to limit them to just 10% of new lending.

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.

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 in the middle of a building boom. Building consents are at record highs, and many of the new dwellings are 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.

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
  • House price cap – the price of the house bought must be less than the regional house price cap, see below
  • 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

House price caps

To qualify for a First Home Loan, the property you purchase must also be below a certain price cap. The caps change from region to region, and are quite restrictive. Especially considering the median NZ house price for December 2021 was $905,000.

The maximum First Home Loan mortgage allowed is the cap for a region, minus your 5% deposit:

Region Existing/older properties New properties
Auckland $625,000 $700,000
Queenstown-Lakes District $600,000 $650,000
Kāpiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City $550,000 $650,000
Hamilton City, Tauranga City, Western Bay of Plenty District, Waipa District, Hastings District, Tasman District, Napier City, Nelson City $525,000 $600,000
Waimakariri District, Christchurch City, Selwyn District $500,000 $550,000
Waikato District, Dunedin City $425,000 $550,000
Rest of New Zealand $400,000 $500,000

Help for first home buyers: KiwiSaver & First Home Grants

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.

first home buyer

KiwiSaver’s First Home Grant

If you’ve contributed to KiwiSaver for at least three years, you might also be eligible for a First Home Grant. This provides first-home buyers with up to $5000 for individuals, and up to $10,000 where there are two or more eligible buyers, to put towards buying an existing property.

First home buyers who intend to buy a brand new property or land to build on can apply for a First Home Grant of up to $10,000 for individuals, and up to $20,000 for two or more.

To be eligible for the First Home Grant you must earn within specific limits. In the 12 months before you apply, you must have earned:

  • $95,000 or less before tax for a single buyer
  • $150,000 or less before tax for two or more buyers.

In addition, the same house price caps apply for the First Home Grant as for the First Home Loan. If you’re considering applying for the First Home Grant, it’s a good idea to look into it before you start looking for a property to buy, because you can’t apply for the grant once you have bought.

For more information on the First Home Grant, check out our story:

Related article: What is the Kāinga Ora First Home Grant? And How Much is It?

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, as well as Kāinga Ora through its First Home Partner scheme.

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 First Home Loans and First Home Grants, 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. For example, if you get the maximum $200k loan under the First Home Partner scheme and, after a couple of years your home increases in value by 10%, it will cost you $220k to buy back Kāinga Ora’s share of your home.

For more information on Kāinga Ora’s First Home Partner scheme, check out our story:

Related article: What is First Home Partner? All You Need to Know!

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

Bruce PitchersThis report was written by Canstar’s Editor, Bruce Pitchers. Bruce began his career writing about pop culture, and spent a decade in sports journalism. More recently, he’s applied his editing and writing skills to the world of finance and property. Prior to Canstar, he worked as a freelancer, including for The Australian Financial Review, the NZ Financial Markets Authority, and for real estate companies on both sides of the Tasman.

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