Start with what you actually have, monthly
Buying a home is a monthly-money problem before it is a property problem. Before you look at listings, know three numbers cold: what comes in, what goes out every week, and what is left over that could become a deposit and then a mortgage payment.
Be honest about the gap between "I should save" and "I do save." If you cannot point to a dollar amount that lands in a dedicated deposit account every payday, the rest of this guide is premature. Pick a number and set up an automatic transfer before you do anything else.
Work forward from your real savings rate, not from a house you want. If you bank $300 a fortnight today, that banks your timeline — not what a friend managed to scrape together.
Run your numbers through our savings goal calculator to see how long your deposit will actually take at the rate you really save. It works backwards too — tell it a target and a date, and it tells you what to save each week or fortnight.
The deposit: what it really takes
In New Zealand, 20% of the purchase price is the standard deposit lenders work from. It sits where it does because of the Reserve Bank's loan-to-value (LVR) rules, which cap how much of a bank's lending can go to buyers with a smaller deposit. At 20%, you clear the threshold, you are not paying for the risk, and you usually get the best rate.
Below 20% is possible, but it is not free. Two separate paths exist:
- Ordinary low-deposit lending. Banks can write a limited share of their lending to buyers under 20% equity, but those borrowers almost always pay a low-equity margin on top of their interest rate, on top of paying either lender's mortgage insurance or a lender fee.
- Kāinga Ora's First Home Loan. Eligible buyers can get in with as little as a 5% deposit, outside the normal LVR limits, because the Crown underwrites part of the risk. It has income caps and regional house price caps, and since mid-2025 the loan carries a mortgage insurance premium. Check the current caps before you lean on it.
A low-equity margin is not a fee you pay once — it sits on your rate every year until your ownership climbs back up near 20%. That can be thousands of dollars a year on a six-figure loan, on top of any upfront insurance.
The other thing to budget for: your deposit is not the only cash you need. On top of the deposit you will pay lawyer and conveyancing fees, a LIM report, a building inspection, and, if you borrow, lender and valuation costs. A common habit is to add 3–5% of the purchase price, on top of the deposit, for these. Keep some so you are never borrowing for the fees.
KiwiSaver: what you can actually use
First, the honest news: the old KiwiSaver First Home Grant is gone. It closed to new applications on 22 May 2024 and no longer exists. Any 2026 guide that tells you to apply for "the first home grant" is out of date — ignore it. Your own KiwiSaver money is still real and useful, but it is your money, not a handout.
What KiwiSaver actually gives a first home buyer is the first-home withdrawal. If you have been a member for at least three years and you buy a home to live in, you can withdraw your own contributions, your employer's contributions, government contributions and the interest you have earned — provided at least $1,000 stays in your account.
A few honest limits:
- House price caps apply depending on the region you are buying in, and for some buyers there are realisable asset caps too.
- You need a letter from your KiwiSaver provider confirming eligibility, and a provider estimate of what you can withdraw — usually before you can get full pre-approval.
- Because your money takes time to reach you, you generally cannot use it for an auction deposit, where you must hand over a deposit on the day.
Requesting the "first-home withdrawal estimate" from your KiwiSaver provider is free and takes minutes. It tells you a real number instead of a guess, and lenders want to see it when you apply for pre-approval.
What you can afford and mortgage pre-approval
A lender will not just ask about your deposit. They assess your whole picture: income, fixed and discretionary expenses, credit history, existing debt, and how you will repay. Since mid-2024 the Reserve Bank's debt-to-income (DTI) limits also cap how much household income can be committed to debt, so being able to afford the deposit does not guarantee being able to afford the loan.
Pre-approval (sometimes called conditional approval) is the lender's rough answer to "how much will you lend me?" before you shop. It is not a promise to lend at a specific property, but it does three useful things: it tells you a realistic price ceiling, it makes your offers credible to agents and sellers, and it stops you falling in love with somewhere out of reach. It typically holds for a few months.
Run your loan scenarios through our mortgage repayment calculator before you talk to a lender. Work out what a weekly or fortnightly repayment does to your budget at a realistic rate, and decide on the number before anyone suggests lending is a good idea.
The steps between deciding and moving in
Once the decision is made, the path is mostly predictable. Not quick — but predictable. Roughly, in order:
- Get the paperwork together. Photo ID, proof of income, three months of bank statements, and your KiwiSaver withdrawal estimate. Get these in one folder now, before anyone asks for them.
- Confirm the deposit number. Add your savings and your KiwiSaver withdrawal, subtract what you must keep. That is your real deposit.
- Get pre-approval. Shop your mortgage with the numbers ready. Choose fixed vs floating based on your tolerance for rate moves and how long you plan to hold.
- Set a total budget, not just a price cap. Price plus fees plus rates and insurance. A home you can buy but not keep is a mistake.
- Research areas and properties. Drive the streets, check commute times, and read the LIM (Land Information Memorandum) for any development, zoning or drainage issues before you bid.
- Inspect before you sign. A builder's report can catch what the eye misses. On an auction there is no cooling-off, so inspection matters most there.
- Make an offer or bid. Section 27 of the Property Law Act gives buyers a short due-diligence window after a signed conditional offer — use it for the reports and finance. Know your absolute limit before the bidding starts.
- Go unconditional and settle. Satisfy the finance and inspection conditions, sign the agreement, pay the deposit, and hand everything to your lawyer. Settlement is the day the keys come to you.
- Move in and budget for what follows. Rates, home insurance, and maintenance are now yours every year.
Deciding to buy is the easy part; the work is the deposits, approvals and reports that come between the decision and the keys. Move in this order — money first, then approval, then property — and you will rarely be wrong.
The ongoing costs nobody warns you about
Buying the home is a one-time sprint. Keeping it is a steady drag, and it surprises more first buyers than the deposit does:
- Rates. An annual charge from your council for everything from roads to rubbish. Budget as part of ownership, not an afterthought.
- Home and contents insurance. Lenders require building insurance as a condition of the mortgage. It is not optional.
- Maintenance. A rough industry rule of thumb is to bank 1% of the home's value a year for upkeep, though smaller places need less and older places often need more.
- Body corporate fees if you buy an apartment or unit, and possibly a water or other fixed charges depending on your council.
- Rate moves. If you fix and the market shifts, or float when fixed terms end, your repayment can change. Keep enough buffer to swallow a rate rise.
Build all of this into your affordability check before you buy, and it stops being a surprise and becomes a line item.