Saving for a deposit? Getting into your first home may be easier than you think

Getting onto the property ladder is a huge financial milestone, and the prospect of living in your own home and owning your first big asset is exciting.

The first step of the home buying process is getting your deposit sorted. In most cases, your deposit needs to be 20% of the value of the property that you're looking to buy, but if you have a deposit of less than 20%, there are still other options we can consider. Your deposit will be one of the main things we'll take into account when working out how much you can afford to borrow for your first home.

You might have enough deposit saved that you don't need any extra help, but as a first home buyer, you may be eligible for one or all three of the government home ownership products which are designed to help people into their first home.



Your savings

Your deposit doesn't have to come solely from your savings. It can be made up of a combination of your savings, money gifted from friends or family, or your KiwiSaver. 

Saving for a deposit can be hard, but the bigger your deposit is, the less money you'll need to borrow from the bank.  

When saving for your first home, it's important to work out what your realistic price range is and what your timeframe is for buying. Do you want to be in your own home in a couple of years? Or sooner? These types of questions will help you work out how much you need to save and then what lifestyle changes you'll potentially need to make to be able to meet this financial goal. 



KiwiSaver first-home withdrawal

If you’ve been a member of KiwiSaver for at least three years, you can withdraw your KiwiSaver savings (including your employer and government contributions) to put towards your first home. Your KiwiSaver savings can only be used to purchase a property you’re intending to live in (not an investment property) and you’ll need to leave a minimum balance of $1,000 in your KiwiSaver account.



KiwiSaver First Home Grant

If you’ve been contributing to your KiwiSaver for three years, you may qualify for a Kāinga Ora – Homes and Communities KiwiSaver First Home Grant of up to $5,000 if you’re buying an existing home; or $10,000 if you’re buying or building a new home. If you’re buying with another person, you both may be eligible for this grant.

  • KiwiSaver First Home Grant criteria
    • You must be 18 years or over

    • Have not received the First Home Grant or KiwiSaver deposit subsidy before

    • You must have contributed regularly to KiwiSaver for a minimum of three years, at least the minimum allowable percentage of your total income

    • Earned $85,000 or less (before tax) in the last 12 months as a sole buyer, or if two or more buyers – a combined income of $130,000 or less (before tax) in the last 12 months

    • Have a deposit that is 10% or more of the purchase price. This can include the KiwiSaver first home withdrawal, First Home Grant and any other funds such as savings, or a deposit gifted by a relative



First Home Loan

With a First Home Loan, you only need a 5% deposit which means getting into your first home just got a lot easier. In addition to meeting the government criteria for a First Home Loan, you’ll need to meet TSB’s standard lending criteria too before your loan can be approved.

  • First Home Loan criteria
    • Earned $85,000 or less (before tax) in the last 12 months as a sole buyer, or if two or more buyers – a combined income of $130,000 or less (before tax) in the last 12 months

    • You’ll need a minimum 5% deposit of the purchase price of the house you’re looking to buy

    • The price of the house you're buying with a First Home Loan must be less than the regional house price cap

    • You’ll need to be a New Zealand citizen or permanent New Zealand resident

    • You must live in the home you're buying. You can’t use the loan to buy an investment property or rental property

    • You cannot own any other property




KiwiBuild is a government supported programme aimed to help more Kiwis into their own homes. KiwiBuild is supporting developers to build quality, affordable housing for first home buyers and second chancers through a ballot process. To buy a KiwiBuild home, you need to check to see if you’re eligible, pre-qualify and then enter a ballot.

  • KiwiBuild criteria
    • You need to be a first home buyer, or in a similar financial position to a first home buyer (second chancers)

    • Have a deposit of 10% or more of the purchase price

    • Be a New Zealand citizen or permanent New Zealand resident

    • Have an income of no more than $120,000 for a single purchaser, or no more than $180,000 for multiple purchasers

    • Intend to own and live in the home as your main place of residence for at least three years

  • What you need to pre-qualify
    • Proof of residency

    • Proof of income

    • Statutory declaration signed by an authorised person (e.g. a Justice of the Peace or lawyer) stating that the KiwiBuild rules will be followed

    • Pre-approval from a bank or other lender

saving for a deposit

A gift from family

You may be able to get your family to help out with your first home deposit. You might have the income to service the loan, but don’t have enough deposit without a family member’s help.

Your deposit may be gifted, or you might agree to pay it back later. We recommend that you and your family member seek legal advice, so you’re both clear on the expectations.



Using a guarantor

Instead of having the deposit gifted to you, another option is for your family member to act as your guarantor.

This means we use the equity from your family’s property as security for your loan. If they’re choosing to act as your guarantor, they’ll be responsible for repaying some or your entire loan if you’re not able to pay it. We recommend getting legal advice on this option as there can be serious implications if you don’t meet your loan obligations.

If you’re unsure if your deposit is enough, the best option is to have a chat with our team – we’ll work through the figures with you. You may find you can buy your first home sooner than you think!