First Home
Loan
GET A HELPING HAND WITH A
A First Home Loan is available for first home buyers
who can aord to make regular repayments on a home
loan but are having trouble saving for a deposit.
A helping
hand
through
the door
A First Home Loan can give
a helping hand when buying
your first home by lowering the
deposit required from the more
standard 20% to only 5%.
Contents
What is a First Home Loan? 2
Check your eligibility 3
Choosing a bank or lender 4
Submitting your application 5
– Applying for pre-approval 5
– Applying for full approval 5
Case study: Toby and Lisa 6
Case study: Sam and Frankie 8
Frequently asked questions 10
Where to find out more 11
Common terms 12
1
A First Home Loan is a low-deposit loan
for first home buyers who are able to make
regular repayments on a home loan but
are having trouble saving for a deposit.
Instead of requiring the more standard
20% deposit, a First Home Loan lowers
thisamount to only 5%.
First Home Loans are only available
through select banks and lenders and
areunderwritten by Kāinga Ora – Homes
and Communities.
Some banks and lenders may also allow
you to buy vacant land and build a new
home with a First Home Loan. Check with
one of the participating banks or lenders
and see what their lending criteria will allow.
What is a First Home Loan?
2
What are dependants?
A person who has dependants has
theresponsibility for part-time or
full-time careof a child, children or
otherdependentadults in a household.
Check your eligibility
To be eligible for a First Home Loan,
you need to meet the following
eligibilitycriteria.
You must:
●
be over 18 years old
●
be a New Zealand citizen, permanent
residentor resident visa holder
●
be a first home buyer or a previous
homeownerin a similar financial position
●
have a before-tax income from the
last12months less than:
– $95,000 for an individual buyer
– $150,000 for an individual buyer
withdependants
– $150,000 combined for multiple buyers.
You will also need to:
●
have a minimum deposit of 5% of the
purchaseprice of the home
●
meet the lending requirements of a
participating bank or lender for a home loan
●
be buying the home for you to live in as your
primary place of residence
●
pay a 0.5% Lender’s Mortgage Insurance (LMI)
premium and loan application fee (if applied
bythe lender).
3
Choosing a bank or lender
Kāinga Ora sets the eligibility criteria but it is the bank or lender that assesses a First
Home Loan application and makes the final lending decision. Choose from one of the
participating banks or lenders below and check their application and lending criteria.
Westpac 0800 177 277 westpac.co.nz
Kiwibank 0800 272 278 kiwibank.co.nz
The Co-operative Bank 0800 554 554 co-operativebank.co.nz
SBS Bank 0800 727 2265 sbsbank.co.nz
Unity 0800 229 943 unitymoney.co.nz
Nelson Building Society 0800 101 700 nbs.co.nz
NZHL 0800 332 837 nzhl.co.nz
4
Once you have selected your preferred
participating bank or lender, you can
apply for a First Home Loan pre-approval
or full approval.
Applying for pre-approval
You can apply for pre-approval to confirm you
meet the First Home Loan eligibility criteria and
the lending criteria of your preferred bank or
lender while you are looking for a home to buy.
Having a loan pre-approval helps you understand
your buying power and gives you a price range
you can consider when looking at homes to buy.
Banks and lenders will apply their own lending
criteria as part of their lending assessment
process. Information they will ask youto
providecan include:
●
proof of identity (a valid photo ID such
asyourcurrent passport or New Zealand
driverlicence)
●
proof of current address (such as a recent
bankstatement or utility bill)
●
evidence of your deposit (inclusive of all
savings, investments, first-home withdrawals
and gifts)
●
evidence of your household income
oremployment details
●
a breakdown of your household expenses
(suchas rent, insurance, utilities and
creditcard payments).
Your loan pre-approval will typically expire after
a fixed period. You’ll need to resubmit or update
your application with the bank or lender before
itexpires.
If you’re a previous homeowner
If you have previously owned a home
orproperty in New Zealand or overseas,
you may still be able to apply for a First
Home Loan. Your preferred bank or lender
will complete an additional assessment
to determine your financial position and
eligibility when you apply.
Submitting your application
Applying for full approval
You can apply for full approval when you have
found a home that you want to buy. Your preferred
bank or lender will complete a final assessment
that confirms your eligibility and outline the
details and the requirements of your home loan.
5
Case study
How Toby and Lisa bought their first
home in Christchurch with a First
Home Loan and a KiwiSaver first-home
withdrawal.
Toby and Lisa
Toby and Lisa have been searching for their first home after moving to
Christchurch with their two young children last year. They found a new
terraced home in the suburbs that was built 6 months ago being sold
for$680,000 that was the perfect size for their family.
Together, they have an annual income of $135,000
but have only been able to save $20,000 over the
last 5 years to go towards their deposit. Both Toby
and Lisa were eligible to make withdrawals from
their KiwiSaver schemes, withdrawing a total of
$45,000 between them. This gave them a total
deposit of $65,000 – approximately 9.6% of the
purchase price.
Speaking with their current bank, they were
advised that they would qualify for a home loan
based on their income but would need a minimum
deposit between 15% and 20%.
After reading about the First Home Loan, they
saw that it might be possible to get a home loan
that only required a deposit starting as low as 5%.
They made a new application to a participating
bank showing the deposit they were able to put
together. The bank completed their assessment,
and they were oered a First Home Loan of
$615,000 to buy the home.
6
Home purchase price
$680,000
Savings
$20,000
KiwiSaver first-home withdrawal
$45,000
Total deposit
$65,000 (9.6%)
Bank loan
$615,000
(90.4% LVR)
7
How Sam and Frankie moved to Hamilton
and managed to purchase their new
home with help from a First Home Loan.
Sam and Frankie
Sam and Frankie have been searching for a home after moving to Hamilton
last year with their young child and Frankie’s mother, who moved in with them
to help with childcare. They managed to find a suitable home in the suburbs
with a small section and well connected to the local school that was being
sold for $650,000.
Case study
Their combined annual income is $125,000 but
they have had trouble saving towards ahouse
deposit, only managing to save $7,000 over the
last 3 years.
Both Sam and Frankie were eligible to make
withdrawals from their KiwiSaver schemes, which
gave them an additional $30,000.
To help with purchasing a home, they also
received a one-time gift from Sam’s parents
of$12,000, which brought their total deposit
to$49,000 – approximately 7.5% of the
purchaseprice.
After checking the eligibility requirements for
a First Home Loan, Sam and Frankie discussed
their circumstances with several participating
banks and lenders to find one that worked for
them. After selecting a lender and making an
application, they were oered a First Home
Loanof $601,000 to buy the home.
8
Home purchase price
$650,000
Savings
$7,000
KiwiSaver first-home
withdrawal
$30,000
Gift from family
$12,000
Total deposit
$49,000 (7.5%)
Bank loan
$601,000
(92.5% LVR)
9
Frequently asked questions
Is there a minimum income needed to
purchase a home with a First Home Loan?
There is no minimum income criteria to be eligible
for a First Home Loan, but your total household
income will need to be enough to meet the lending
requirements of a participating bank or lender to
service a home loan.
How much of a deposit will I need to buy
ahome with a First Home Loan?
The exact amount you will require for a deposit
will depend on the purchase price of the home
youwant to buy, but you will need to contribute
anoverall minimum deposit of 5%.
Do banks and lenders have identical
requirements for a First Home Loan?
Kāinga Ora sets the minimum criteria for the
FirstHome Loan, but banks and lenders may
apply dierent additional criteria as part of
theirown lending assessment.
If my application for a First Home Loan
isdeclined, will I get turned down by
another bank or lender?
Banks and lenders have their own lending
criteriathey will assess you on, and the
application process may vary. It is recommended
you talk with your preferred banks or lenders
about your individual circumstances.
Can I use my KiwiSaver to help purchase
ahome with a First Home Loan?
Yes. If you are a first home buyer and have
been contributing to a KiwiSaver fund for at
least 3years, you may also be able to withdraw
yoursavings to put towards a home purchase.
Can I use a First Home Loan to purchase
aKiwiBuild home?
Yes, provided you meet the eligibility criteria
andhave submitted a successful application
foreach separately.
Can I use a First Home Loan to build
anewhome?
Check the lending criteria of your preferred
participating bank or lender to see if they allow
aFirst Home Loan to be used for building a home.
Are there any fees for getting a First
Home Loan?
Kāinga Ora charges a Lender’s Mortgage
Insurance premium to the lender to insure each
First Home Loan (0.5% of the loan amount) that
you may be required to reimburse the lender for.
Banks and lenders will also set their own interest
rates and fees that apply to your home loan.
What happens if my circumstances change
after I receive my home loan?
If your circumstances change and may
aectyourability to repay your home loan,
youwill need to get in touch with your bank
or lender. They will talk you through options
appropriate toyour circumstances.
I own land with no home on it. Am I still
eligible for a First Home Loan?
No. You will not be eligible for a First Home Loan
if you currently own or have an interest in land,
even if there is no home currently on it.
10
If you would like to start an application or
find out more about the First Home Loan:
Visit
kaingaora.govt.nz/first-home-loan
Email
firsthome.enquiries@kaingaora.govt.nz
Call
0508 935 266
To learn more about home ownership
requirements and other products
and programmes, you can also visit
kaingaora.govt.nz/home-ownership.
Where to find out more
Useful resources
Citizens Advice Bureau
A nationwide community organisation that
oers free, confidential and independent
advice to helpcitizens understand their
legal rights and obligations.
cab.org.nz
FinCap
A non-government organisation that
supports financial mentoring services
andtraining.
fincap.org.nz
Find a building inspector
Search for a building inspector in your area.
boinz.org.nz
Find a solicitor
Search for a solicitor and get guidance
onhow to find the right one for you.
propertylawyers.org.nz
Settled
Free and independent information to
guide New Zealanders through all aspects
of buying and selling a home. Settled is
managed by the Real Estate Authority,
thegovernment agency that regulates
theNew Zealand real estate industry.
settled.govt.nz
Sorted
Free and independent tools and
resourcesto help you budget and
getyourfinances sorted.
sorted.org.nz
11
Common terms
Deposit
A portion of money paid upfront to secure the
purchase of a home.
Eligibility criteria
The specific criteria that determine if an
applicantis eligible for a First Home Loan.
First home buyer
An individual who has not previously owned
ahome or land in New Zealand or overseas.
First Home Loan
A low-deposit loan for first home buyers
underwritten by Kāinga Ora and issued
byparticipating banks and lenders.
Home loan
A financial loan given by a bank or other
financiallenders for the purposes of
purchasingaresidential home or property.
Interest rate
The interest charged on a financial loan.
Kāinga Ora
A Crown agency of the New Zealand
Governmentthat oversees the implementation
ofthe government’s housing and urban
development policies.
KiwiBuild
A government programme that works with
residential developers to speed up development
and provide New Zealanders with opportunities
topurchase new homes at more aordable prices.
KiwiSaver
A voluntary savings scheme designed to
helpNewZealanders saving for retirement
through regular contributions made from
members’ earnings, employer contributions
andthe government.
KiwiSaver first-home withdrawal
A one-time option to withdraw all or part
ofsavings from a KiwiSaver fund to put
towardsthe purchase of a first home.
Lender
A participating bank or financial lender who will
lend money for the purposes of a home loan for
eligible applicants wanting to buy a home.
Lender’s Mortgage Insurance (LMI)
An insurance policy that protects the lender from
financial loss in the event that the borrower can’t
maintain their home repayments.
Lending criteria
The requirements set by a bank or lender
thataloan applicant must meet as part
ofalending assessment.
Loan
A sum of borrowed money (such as ahomeloan).
Loan to Value Ratio (LVR)
The amount you’re looking to borrow, divided
by the value of the property you want to buy
expressed as a percentage. Itmeasures how
much a bank lends against mortgaged property,
compared tothe value ofthatproperty.
Pre-approval
Confirmation that you meet the eligibility criteria
for a First Home Loan and the lending criteria
ofa bank or lender beforeyou have found a
hometobuy.
Previous homeowner
An individual who has previously owned a home
or land either in New Zealand oroverseas but no
longer does.
12
Published in June 2024 by
Kāinga Ora – Homes and Communities.
This booklet is also available at
kaingaora.govt.nz/home-ownership.
Disclaimer
The material contained in this brochure is intended to help you understand the First Home Loan and is for
informational purposes only. Its content is intended to be of a general nature and does not take into account specific
circumstances of any particular individual or entity. All reasonable steps have been taken to ensure the quality and
accuracy of the information presented. The eligibility criteria or other policies applicable to the First Home Loan, or
any home ownership product administered by Kāinga Ora may be changed, deleted, added to or otherwise amended
without notice. It is recommended you seek independent professional advice before applying for or acquiring any
financial product or service.