If you’ve been putting off buying your first home, or not sure whether the time is right, there have never been such great options for buyers.
While most of the headlines have been dominated with interest rate rises and endless talk of house prices rising and falling across the country, there’s another positive story in the wings and it’s all coming up trumps for first home buyers.
A few interesting shifts have happened across the lending landscape across the last few years to build a melting pot of positivity for our newest homeowners.
So let’s get into it!
1. The First Home Loan is still open, and it’s helping people
A lot of people assume this scheme has disappeared, or that it’s only for people earning very little or buying for a very low purchase price, which used to be the case.
Others think that the first home loan disappeared with the grant, which expired in 2024.
But it’s still going stronger than ever, and is one of the most common ways for people to buy their first homes.
You can still buy with as little as 5% deposit through the First Home Loan.
The income caps sit at $95,000 for a single buyer and $150,000 for a couple buying together, which covers a lot more Kiwi households than people expect.
Yes, there’s an insurance premium of 1.2% of the loan amount, but you don’t need to find that in cash. It gets added to your loan.
So if you’ve been sitting there thinking “I’ll never get to 20%, so I’m stuck,” that’s simply not the full picture anymore.
If you’d like to learn a bit more about this, we ran a webinar last month with all you need to know.
2. The banks have room they’re not using
When I went searching for some data around whether the banks were using their full high LVR lending capacity, I was a bit surprised by the numbers.
The Reserve Bank allows banks to lend up to 25% of their new owner-occupier lending to buyers with less than a 20% deposit. Looking at the Reserve Bank’s own lending data, banks have actually been sitting at around 17-18% through the first five months of 2026.
That means there’s still real headroom, great news for anyone with a lower deposit who isn’t eligible for the first home loan.
Practically, this means that there is plenty of capacity across the banks for this type of lending which is awesome.
And when one lender may be closer to their limit, others may not be, it’s often variable and appetites change even week to week.
Some banks do require pre-approvals to be allocated to their existing customers, or for borrowers to have a property in mind, and we’re giving advice around this all the time.
3. The lending conversation itself has calmed down
If you remember 2021 and 2022, you’ll remember the horror stories. Banks combing through three months of bank statements line by line. Getting queried on a weekly coffee or Netflix subscription.
It was well reported, genuinely adhered to, and every day we still talk to people who don’t know this has now changed a lot.
Those rules have eased substantially. Banks now have more flexibility to have a normal, human conversation about your spending.
An adviser can point out that a takeaway habit or subscription would naturally get scaled back once a mortgage is in the picture, and banks are far more willing to accept that than they were a few years ago.
It’s not a free-for-all, lenders still need to be satisfied you can repay the loan without hardship, but the tone of the process has shifted from adversarial to very workable.
So what does this actually mean for you?
Put those three things together: a low-deposit scheme that’s supported, very accessible, real unused lending capacity sitting inside the banks, and a more reasonable assessment process, and you get a window of opportunity that many first home buyers are taking right now.
Yes, interest rates are moving up again after the OCR hike this month, and more are expected to come, and it does mean the numbers need to stack up properly, not just “hopefully.”
But the rates and housing market landscape is very different to access. Access to lending options has genuinely improved over the past few years, so don’t let the headlines convince you the door is still closed if buying a home is on your list for 2026.
If you’ve written yourself off because of something that was true in 2022, it might be worth another look.
Book a call with one of us to have a chat and find out just how close you are!
