What is the First Home Loan?

It’s always been tough to save a deposit to buy a first home. However, there is some assistance available for first home buyers. And one option is the First Home Loan from Kāinga Ora. So what is it? Canstar guides you through:

What is the First Home Loan

The First Home Loan is a financial support program offered by Kāinga Ora. Most lenders currently require a minimum 20% deposit for a home. But with a First Home Loan you only need a 5% deposit. This is because Kāinga Ora underwrites the loan, allowing lenders to provide loans that would otherwise sit outside their lending standards.

First Home Loans are issued by several lenders, including: Kiwibank, SBS Bank, The Co-operative Bank, Westpac and Unity.

It’s worth noting that the First Home Loan is completely separate from the First Home Grant, which is no longer running. The First Home Loan scheme is still accepting applications.

Can anyone get the First Home Loan?

No, to be eligible for the First Home Loan you must meet strict criteria. So it’s not for everyone. Below is an overview of the key requirements:

• Income cap – a maximum yearly income of up to $95,000 (before tax) for one person. A combined maximum yearly income of up to $150,000 (before tax) for two or more applicants, or a maximum yearly income of $150,000 for an individual buyer with one or more dependants
• Minimum deposit – a minimum 5% of the purchase price of the house you want to buy
• You must live in the home you buy – a First Home Loan cannot be used to buy an investment or rental property
• You need to pay Lender’s Mortgage Insurance (LMI) (and any loan application fees) – this LMI premium is 0.5% of the loan amount and is usually added onto your mortgage
• First home buyers only – or you can be a previous homeowner who is in a similar financial position to a typical first home buyer
• You must be an NZ citizen – or permanent New Zealand resident or a resident visa holder who is ordinarily resident in New Zealand
• Small(ish) property – must be purchasing a property of less than one hectare
• Not own any other property or land – this does not include ownership of Māori land

You can get more details from the Kāinga Ora website here.

Compare KiwiSaver

KiwiSaver is a very popular way for prospective first home buyers to save for a deposit. But you choice of funds can have a big difference on your returns. So if you’re planning to use KiwiSaver to purchase a first home, have you checked the performance of your fund and fund provider recently, because you could be missing out!

At Canstar we compare a range of KiwiSaver funds and award the best providers accordingly. If you want to know more, or want to see how your KiwiSaver fund stacks up, click the button below:

Compare KiwiSaver providers

Looking for a home loan?

If you’re currently considering a home loan, the table below displays some of the 2-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.