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Using KiwiSaver for your unconditional day deposit?

For many first home buyers, their KiwiSaver forms a large part (some if not all) of their deposit for a home, and we are frequently asked the question as to how this can be used to pay their deposit on unconditional day.

Firstly - for the difference between your overall deposit and the one you pay via your Sale & Purchase Agreement - check out our blog here 

So let's debunk some myths - KiwiSaver can be used to pay your deposit and is regularly used as such. However it does mean you need to be organised and get your KiwiSaver approved for withdrawal at least 10 days prior to the day you need it. 

It also means you need at least a 10 day finance clause on your Sale & Purchase Agreement - we're here to help if you need to chat about whether this is right for you!

Your lawyer will need to confirm with your provider as part of the process that your KiwiSaver is definitely being used to purchase a property and that the property settlement will indeed go ahead.

How does the process work?

  • You can complete the form, including the part your lawyer needs to fill out as funds are paid to them
  • Once your offer is accepted you can submit this to your KiwiSaver provider for approval
  • They can take up to 10 days to provide confirmation your withdrawal has been approved
  • Once approved they can pay funds to your solicitor
  • Your solicitor can then use these funds to pay the deposit when it falls due on unconditional day

It’s a common process and has been for a few years now that people can use their KiwiSaver funds toward deposit. Many buyers have no deposit aside from KiwiSaver so it’s important this option is there. We can recommend lawyers to advise on this when you need it!  

What are the other options for deposit?

Before KiwiSaver was made available for buyers to use as deposit (and assuming they didn't have a cash deposit) it was normal for the bank to provide a temporary OD facility to pay the deposit but this can cause delays and be quite costly as this interest rate is often around 15%. It is still available in many situations though so talk to us if you don't think your KiwiSaver will be available in time!

KiwiSaver is a wonderful scheme to help first home buyers into their own homes and with some forward planning and the right people on your team - you can use it to pay your deposit on unconditional day (before you pop the champagne!)

Get in touch with us about how we can help you manage this process smoothly - all completely free of charge!


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