Kāinga Ora First Home Loan and KiwiSaver: buying with a 5% deposit

The Kāinga Ora First Home Loan lets eligible first home buyers buy with as little as a 5% deposit, instead of the 20% most banks ask for. Many couples use their KiwiSaver first home withdrawal to make up that 5%. To qualify, your income must be under $95,000 as a single buyer without dependants, or under $150,000 for two or more buyers or a single buyer with dependants.

For a lot of young families in South Auckland, the deposit is the hardest part of buying a first home. Rent, childcare and the weekly shop don't leave much over. The First Home Loan, together with KiwiSaver, is the main way families get into a home sooner. Here's how the two fit together, and what to think about once you're in.

What is the Kāinga Ora First Home Loan?

It's a home loan from a participating bank or credit union that Kāinga Ora underwrites, which means it backs part of the lender's risk. Because of that, the lender can accept a 5% deposit. These loans also sit outside the Reserve Bank's usual low-deposit lending limits.

A smaller deposit doesn't mean an easier approval. You still need to pass the lender's normal checks on income, expenses, debts and credit history to show you can afford the repayments.

Who can get a First Home Loan?

The main criteria are:

Income: under $95,000 before tax for a single buyer without dependants, or under $150,000 for two or more buyers or a single buyer with dependants, based on the last 12 months.
Deposit: at least 5% of the purchase price.
First home: you're a first home buyer, or a previous owner that Kāinga Ora assesses as being in a similar financial position.
Living there: the home must be for you to live in, not an investment.

There are no national house price caps. Kāinga Ora's website has the full criteria, including residency rules, and a list of participating lenders.

About home loan advice: I give insurance and KiwiSaver advice, not mortgage advice. This is general information to help you plan. The mortgage advisers at Moneyplant will go through the details with you, including how lenders assess your application, how much you can borrow and which lender suits you.

How KiwiSaver fits in

If you've been in KiwiSaver for at least three years, you can usually withdraw everything except $1,000 to put toward your first home. For a couple, that's two withdrawals, which often covers most or all of a 5% deposit.

Here's an example for a couple buying a $700,000 home:

Item	Amount
5% deposit needed	$35,000
Partner one's KiwiSaver ($22,000, less $1,000 left in)	$21,000
Partner two's KiwiSaver ($15,000, less $1,000 left in)	$14,000
Total from KiwiSaver	$35,000
Amount borrowed	$665,000

To see what your own KiwiSaver could add up to by the time you buy, try my KiwiSaver first home calculator. The step-by-step guide to withdrawing your KiwiSaver covers the paperwork and timing.

Costs to plan for besides the deposit

Lawyer's fees, a building inspection and moving costs all come on top of the deposit. First Home Loans also carry a lender's mortgage insurance premium. Since the government stopped contributing to it, that premium has risen to about 1.2% of the loan. On the example above, that's roughly $8,000. Ask your mortgage adviser how it will be charged.

Could the income caps change?

Possibly. In September 2026, the National Party said it would lift the income cap to $300,000 for all buyers if re-elected at the November election. That's an election promise, not current law. Until anything changes, the caps above apply, so check Kāinga Ora's website for the latest before you plan around it.

A 5% deposit means protection matters more

With a 5% deposit, you owe 95% of your home's value from day one. That's fine while both incomes keep coming in. But if one of you couldn't work for six months because of illness or injury, or the worst happened, the repayments don't stop.

This is the part of buying a home I help families with. A few things worth sorting before settlement:

Income or mortgage protection, so the repayments are covered if one of you can't work.
Life cover big enough to clear the mortgage and give your family breathing room.
Trauma cover, so a serious illness doesn't drain your savings.

My how much insurance do we need calculator gives you a rough starting figure.

Your next steps

Check your KiwiSaver eligibilityMake sure you've each been a member for at least three years by the time you buy.
Run your numbersUse the KiwiSaver calculator to see how close you are to 5%.
Talk to a mortgage adviser about pre-approvalThey'll check you against the First Home Loan criteria and find a participating lender. My colleagues in the Moneyplant mortgage team do this every day.
Get your protection sorted before settlementHave the right cover in place from the day you get the keys. Book a free chat and I'll help you work out what you need.

Quick answers

Can I use my KiwiSaver as the 5% deposit for a First Home Loan?

Yes. Your KiwiSaver first home withdrawal can count toward the deposit, as long as you meet the KiwiSaver withdrawal rules as well as the First Home Loan criteria.

What are the First Home Loan income caps?

$95,000 before tax for a single buyer without dependants, and $150,000 for two or more buyers or a single buyer with dependants. These caps have been in place since 2022.

Is there a house price cap on the First Home Loan?

There are no national house price caps. Your lender still decides how much you can borrow based on your income, expenses and credit history.

Sources and further reading

This article is general information, not personalised financial advice. Rules and criteria can change, so check the latest details with the official sources above or talk to an adviser about your situation.

About the author

Kyle Hasson (FSP1010252) is an Insurance and KiwiSaver Adviser at Moneyplant in Papakura. He helps young South Auckland families prepare for their first home, protect it, and keep growing their savings after. More about Kyle