Buying a first home in New Zealand in 2026 looks different than it did a few years ago. The First Home Grant, which gave eligible buyers up to $10,000 toward a new build, ended in May 2024. That cash is no longer available. But the government still supports first-home buyers through other channels — mainly the KiwiSaver First Home Withdrawal and the Kāinga Ora First Home Loan. These two schemes can still make a big difference, but only if you know exactly how they work and what the limits are.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The KiwiSaver First Home Withdrawal is still active. You can take out your contributions, your employer’s contributions, and the investment returns — as long as you leave $1,000 in the account. Typical withdrawal amounts sit between $10,000 and $80,000, depending on how long you’ve been saving and how much you’ve earned. The money doesn’t come to you directly. It goes to your conveyancing solicitor, who applies it toward the purchase at settlement. Processing takes 10 to 15 working days, so you need to apply four to six weeks before settlement.
The Kāinga Ora First Home Loan is a government-backed mortgage that lets you buy with a 5% deposit. That’s lower than the 20% most banks want without mortgage insurance. But there’s a trade-off: the interest rate on a First Home Loan is typically 0.25% to 0.50% higher than a standard mortgage, and you may still need Lender’s Mortgage Insurance. The loan comes with income caps and regional price caps that determine what you can buy and where. Here’s what you actually need to know.
What I tend to notice is that people focus on the grant that’s gone and miss the schemes that are still running. The KiwiSaver withdrawal and the First Home Loan are both active, and together they can cover a lot of ground. But the rules around income, price caps, and timing are strict. One mistake can delay your purchase by months.
What the full cost picture looks like for first-home buyers in 2026
The purchase price is never the only number that matters. For a first-home buyer in New Zealand, the real cost includes the deposit, legal fees, building inspection, valuation, moving costs, and any gap between the mortgage rate you qualify for and the rate you actually pay. The First Home Loan helps with the deposit, but the higher interest rate adds up over time.
Take a buyer on an $85,000 salary looking at a $650,000 home. With a standard mortgage at 6.5%, the monthly repayment on a 30-year loan with a 20% deposit is roughly $3,270. With a First Home Loan at 6.9% and a 5% deposit, the monthly repayment jumps to about $4,050. That’s nearly $800 more per month. Over five years, the difference is around $48,000 in extra payments.
Regional price caps also limit what you can buy. In Auckland, the cap for an existing home is lower than for a new build. In Wellington city, the cap sits at $750,000. If the property you want costs more than the cap, you can’t use the First Home Loan for it. You’d need a standard mortgage with a bigger deposit. That’s where combining your KiwiSaver withdrawal with personal savings becomes critical.
Legal fees, building reports, and valuations typically add $2,000 to $5,000 to the upfront cost. A property law consultation can help you understand what your solicitor will handle and what the conveyancing process involves. That’s money you need before settlement, not after.
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| Region | Existing home cap | New build cap |
|---|---|---|
| Auckland | $625,000 | $875,000 |
| Wellington city | $750,000 | $750,000 |
| Christchurch | $500,000 | $600,000 |
| Hamilton | $550,000 | $700,000 |
| Tauranga | $600,000 | $750,000 |
| Dunedin | $500,000 | $600,000 |
The caps change depending on whether the property is an existing home or a new build. New builds generally have higher caps, which is one reason some buyers target new developments. But new builds also come with their own costs — higher prices in some areas, longer settlement timelines, and potential delays in construction.
Common mistakes first-home buyers make with these schemes
Assuming the First Home Grant is still available
The First Home Grant ended on 22 May 2024. It’s not coming back. The government redirected the funding — roughly $245 million — toward social housing supply. Some buyers still search for “first home grant NZ” and find outdated information. If you’re planning your finances around a grant that no longer exists, you’ll come up short. The KiwiSaver First Home Withdrawal is your main source of government-supported cash now. Check the Better Money guide for current eligibility details.
Not checking income and price caps before you start
The income cap for a single buyer is $95,000 pre-tax. For couples, it’s $150,000 combined. If you earn $96,000, you don’t qualify. The price cap for an existing home in Auckland is $625,000. If the cheapest house in your area is $700,000, the First Home Loan won’t work for that property. Buyers sometimes spend weeks looking at homes before realising none of them fall under the cap. Use the Kāinga Ora online eligibility tool first. It takes five minutes and saves you from wasting time on properties you can’t buy with this loan.
Applying for the KiwiSaver withdrawal too late
The withdrawal takes 10 to 15 working days to process. But that’s just the time Kāinga Ora takes to approve it. Your solicitor needs to receive the funds and apply them to the settlement. If you apply two weeks before settlement, you’ll miss the date. The rule is simple: apply four to six weeks before settlement. The money goes to your conveyancing solicitor, not to your bank account. You can’t use it for the deposit — it goes toward the final purchase price at settlement. If you’re unsure about the process, a finance advice consultation can clarify the timeline.
Ignoring the higher interest rate on the First Home Loan
The First Home Loan lets you buy with a 5% deposit, but the interest rate is typically 0.25% to 0.50% higher than a standard mortgage. On a $600,000 loan, that’s an extra $1,500 to $3,000 per year in interest. Over a 30-year term, the total extra cost can exceed $45,000. Some buyers focus on the low deposit and forget about the long-term cost. If you can save a 10% or 20% deposit, a standard mortgage at a lower rate may work out cheaper overall. The First Home Loan is a tool, not a shortcut.
How to combine KiwiSaver, the First Home Loan, and savings to buy your first home
Check your eligibility before you do anything else
Start with the Kāinga Ora online eligibility tool. You’ll need your income, your partner’s income if applicable, and the region you want to buy in. The tool tells you whether you qualify for the First Home Loan and the KiwiSaver withdrawal. If you’re over the income cap, you can’t use either scheme. If you’re under the cap but the property you want is over the regional price cap, you can still use the KiwiSaver withdrawal — just not the First Home Loan. That distinction matters because the withdrawal doesn’t have a price cap. You can use it on any property, as long as you meet the KiwiSaver membership requirements.
Calculate how much you can withdraw from KiwiSaver
You can withdraw your member contributions, employer contributions, and investment returns. You must leave $1,000 in the account. The total depends on how long you’ve been a member and how much has been paid in. A typical withdrawal ranges from $10,000 to $80,000. If you’ve been a member for five years and contributed at the minimum rate, you might have $15,000 to $25,000 available. If you’ve been a member for 15 years with higher contributions, you could have $60,000 or more. Your KiwiSaver provider can give you a withdrawal estimate. Apply four to six weeks before settlement. The funds go to your solicitor.
Understand what the First Home Loan actually covers
The First Home Loan is a mortgage, not a grant. The government backs it so the lender accepts a 5% deposit. You still need to repay the full loan amount with interest. The interest rate is higher than a standard mortgage — typically 0.25% to 0.50% above the bank’s standard rate. You may also need Lender’s Mortgage Insurance, which adds to the monthly cost. The loan is available for properties at or below the regional price cap. If you’re buying a new build, the cap is higher in most regions. The loan can be combined with your KiwiSaver withdrawal and personal savings to make up the deposit and cover costs.
Plan for the costs that come after the deposit
The deposit is one thing. The other costs add up. Legal fees for conveyancing typically run $1,500 to $3,000. A building inspection costs $500 to $1,000. A valuation may cost $600 to $900. Moving costs, connection fees for utilities, and any immediate repairs or furnishings add more. If you’re using the First Home Loan, the higher interest rate means your monthly mortgage payment will be higher than a standard loan. Factor that into your budget before you commit. A business and finance consultation can help you model the full cost over the first five years.
Consider the Tenant Home Ownership Grant if you’re a Kāinga Ora tenant
If you currently rent a Kāinga Ora property, you may qualify for the Tenant Home Ownership Grant. It provides 10% of the purchase price, up to $20,000, toward buying your first home. This is a separate scheme from the First Home Loan and the KiwiSaver withdrawal. You need to be a Kāinga Ora tenant and meet the same income and price caps. The grant can be combined with your KiwiSaver withdrawal and a First Home Loan. It’s one of the few cash-like benefits still available, but only for existing Kāinga Ora tenants.
Frequently asked questions about first-home buyer incentives in NZ
Can I use the KiwiSaver withdrawal for the deposit? ▾
What happens if I earn over the income cap? ▾
Can I use the First Home Loan on any property? ▾
Is the First Home Grant coming back? ▾
Can I combine the First Home Loan with a shared-equity loan? ▾
What if I have an Australian superannuation fund? ▾
The shift from grants to loans changes how you plan
The end of the First Home Grant marks a real shift in how New Zealand supports first-home buyers. The government has moved away from giving cash and toward backing loans. That means the upfront help is smaller, but the ongoing support — through lower deposit requirements — is still there. The KiwiSaver withdrawal and the First Home Loan are both active, and the Tenant Home Ownership Grant offers a small cash boost for Kāinga Ora tenants. The key is knowing which schemes apply to you and planning the timeline carefully. Apply for the KiwiSaver withdrawal early, check the price caps before you start viewing homes, and factor in the higher interest rate on the First Home Loan. The schemes work, but only if you use them correctly.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Flatmate or Forever Home: Choosing the Right Mortgage Strategy in NZ.
Sources and Further Reading
Key Factors to Consider When Buying a Home in NZ — A broader look at the full checklist for first-home buyers, from inspections to settlement.
Tips for Understanding Property Tax Obligations in New Zealand — Covers the tax side of buying, including bright-line rules and GST on new builds.
Lifetimes (2024). Government Grants for First Home Buyers in NZ. 🔗
Mortgage Managers (2026). First Home Grants List NZ Buyer’s Guide 2026. 🔗
Better Money (2026). First Home Buyer NZ Guide. 🔗
