Buying your first
home in NZ.

The honest answer is: aim for 20% of the purchase price, but you can start with less. At a 20% deposit your LVR (loan-to-value ratio) is 80%, and that's where banks give their sharpest rates.

Buy with less than 20% and most banks add a low-equity margin — extra interest that's the price of a smaller deposit. It's not a dealbreaker, just a cost worth knowing. Many first-home buyers get in with a 10% deposit, and some with as little as 5% through the Kāinga Ora scheme below.

If you've been in KiwiSaver for at least three years, you can withdraw most of your balance to put toward a first home — you just have to leave $1,000 in the account. For most first-home buyers this is a big chunk of the deposit.

The withdrawal takes a few weeks to process, so start it early — well before you go unconditional on a property. Your provider and your lawyer handle the mechanics.

Kāinga Ora is the government housing agency. Its First Home Loan lets eligible first-home buyers borrow with as little as a 5% deposit instead of the usual 20%, through selected banks and lenders — without the low-equity margin a normal 5% loan would carry.

There are income caps and house-price caps, and they change over time and by region. So it's worth checking whether you qualify rather than assuming. There's also sometimes a First Home Grant and other support — government schemes come and go, so confirm what's currently on offer with Kāinga Ora or a licensed adviser before you count on it.

Two things decide how much a bank will lend you, and it's the lower of the two that binds:

• The servicing test. Banks don't just check you can afford today's rate — they check you could still pay at a higher "test" rate (often around 6.5–7%), so you're safe if rates rise.
• DTI (debt-to-income). The Reserve Bank caps most lending at around 6× your household income. On $120,000 income that's roughly a $720,000 borrowing ceiling.

Clearing small debts (car loans, credit cards, buy-now-pay-later) before you apply can lift both — banks count those repayments against you.

Once your deposit and income stack up, get pre-approval — a bank's conditional "yes" to lend you up to an amount, so you can bid or make offers with confidence. It takes a few weeks and usually lasts about three months, so time it for when you're genuinely ready to buy.

From there it's open homes, offers, and — when one sticks — going unconditional and settling. An adviser (free to you, paid by the lender) can line the banks up and often get you a sharper rate or more cashback than going it alone.