Demystifying the Kāinga Ora First Home Loan
Your ultimate guide to buying your first home with just a 5% deposit.
Buying your first home is a massive milestone, but figuring out how to get there can feel like a bit of a maze. That’s where we come in.
We are all about taking the stress out of the process, breaking down the numbers into plain English and helping everyday Kiwis get straightforward, honest advice they can actually use. We handle the paperwork and chat with the banks so you don’t have to worry about the nitty-gritty.
Whether you’re just starting to save or you’re ready to hit the open homes this weekend, we’ve put this guide together to give you a clear, down-to-earth look at how it all works and show you exactly how we can help.
What exactly is the Kāinga Ora First Home Loan?
Most standard banks require a 20% deposit to avoid extra fees or strict lending rules. This is a requirement of the Reserve Bank who sets the rules on how much money banks can lend to those with less than a 20% deposit.
The First Home Loan is a government-backed scheme designed specifically to support people into homes quicker.
Kāinga Ora doesn’t actually lend you the money. Instead, they underwrite the loan. Think of them as a giant, supportive guarantor. Because the government is backing your loan, selected banks and lenders are allowed to lend to you with just a 5% deposit.
Why is the Kāinga Ora First Home Loan a game changer?
Get it sooner
You can buy a home much faster than waiting to save a 20% deposit.
Use your KiwiSaver
Your 5% deposit can come entirely from your KiwiSaver withdrawal.
Fewer roadblocks
While banks are usually incredibly picky with low-deposit borrowers, the Kāinga Ora backing softens their rules, the main one being that First Home Loans are unlimited.
Do you qualify?
The income caps
Your gross (before tax) income over the past 12 months must be:
$95,000
or less for a single buyer.
$150,000
or less for a single buyer with dependants.
$150,000
or less for two or more buyers combined (regardless of dependents).
The general criteria
Citizenship
You must be a New Zealand citizen, permanent resident or a resident visa holder.
Your intent
You must intend to live in the house as your primary residence for at least 6 months. This cannot be used for an investment property.
First-Timer Status
You cannot currently own any other property or land (there are “second chance” exceptions if you’ve been through a separation - ask us about this!).
Employment
You typically need to have been in your current job for at least 12 months, or have a solid 24-month track record in the same industry.
Important note on your deposit: Because this scheme is designed for people who genuinely need it, you are required to put your available deposit funds forward first. You aren’t allowed to hold back more than $5,000 in cash for renovations or furniture.
The "hidden" hurdles and how we cross them
Ticking the Kāinga Ora boxes is only half the battle. You still need a bank to actually approve the loan. This is where many buyers get stuck, but where a mortgage adviser is your secret weapon.
1. Debt serviceability
Even with a 5% deposit, the bank needs to know you can afford the weekly repayments. When banks calculate this, they don’t use today’s current interest rate - they test you at a higher “test rate” to ensure you can handle future market changes.
2. Clean account conduct
Banks will look closely at your last 3-6 months of bank statements. They want to see that you manage your money well. Avoid unarranged overdrafts, late payments or heavy usage of Buy Now, Pay Later (BNPL) schemes in the lead-up to your application. But all is not lost if you do have these - talk to us if you’re not sure.
3. The Property "WOF"
The house you buy needs to pass the bank’s standards. It needs to be located in an area with comparable properties, be structurally sound and free of major unconsented works.
Your step-by-step roadmap to buying
1. The initial chat
Reach out to the My Mortgage team. We’ll look at your income, debts, and KiwiSaver to confirm if the First Home Loan is your best option.
2. Get pre-approved
We gather your documents and pitch your application to the right lenders to secure a conditional pre-approval. This tells you exactly what your budget is.
3. Go hunting
With confidence in your budget, you can start hitting open homes and looking for the perfect place.
4. Make an offer
When you find the house, we work alongside your lawyer to review the contract, satisfy the bank’s conditions and get you to settlement day!
Ready to stop renting? Let’s make it happen.
The rules around first-home buying change often and trying to figure it out on your own can feel overwhelming.
At My Mortgage, we take care of the heavy lifting, the phone calls to the banks and the fine print so you can focus on the exciting part: finding your home. Let’s find out what you qualify for.
