Most New Zealand first-home buyers use KiwiSaver to buy their first home. And, no wonder – it’s a great way to kick-start your home-ownership goals. The First Home Grant and First Home Loan are designed to give even more assistance to first-home buyers. With these options at your fingertips, you’ll be buying a property before you know it!

KiwiSaver first-home withdrawal

If you qualify, you may be able to withdraw some of your KiwiSaver savings, including your member contributions, employer contributions, interest and tax credits, to help you buy your first home. Here’s what you need to know: 

• You must have been a KiwiSaver member for three or more years
• You must leave at least $1,000 in your KiwiSaver account
• You must intend to live in the home – you can’t use it to purchase an investment property
• The scheme is aimed at those buying their first home, but in some cases, people who have owned a home before may be eligible if they are deemed to be in the same financial position as a first-home buyer – talk to your mortgage adviser about whether this applies to you.

You can apply to your KiwiSaver provider to make a first-home withdrawal, but be aware that not all KiwiSaver providers allow these types of withdrawals.

First Home Grant

With a First Home Grant, first-home buyers may receive up to $5,000 (or $10,000 if there are two or more eligible buyers) to help purchase a home. For a brand-new home, you may receive even more – up to $10,000 (or $20,000 for two or more eligible buyers). The amount of the grant depends on how long you have been a KiwiSaver member and there are caps on your income and the value of the home you can purchase:

• • You must have been a KiwiSaver member for three or more years – and you must have been making the required minimum annual payments;
  • You must earn less than $85,000 before tax annually (or combined household income less than $130,000 for two or more people);
  • You can use the grant to purchase an existing or new home up to a maximum value, which varies depending on where in the country you are purchasing.
  • The amount of the grant depends on how long you have been a KiwiSaver member:
    • For existing homes, $3,000 for the minimum requirement of three years, and an additional $1,000 per year of membership – up to a maximum of $5,000 per member.
    • For new homes (or land to build on), this doubles to $2,000 for each year of membership – up to a maximum of $10,000 per member.

• Two or more eligible members can pool their benefits to buy a home together, up to a maximum of $10,000 for buying an existing home or $20,000 for a new property.
• You must be 18 years or over;
• You must have a deposit of at least 5% of the purchase price (though this can include your First Home Grant);

You must be purchasing the home to live in and, generally, only first-home buyers are eligible, but there are sometimes exceptions.

First Home Loan

First Home Loans are special loans available from some banks. They’re underwritten by Housing New Zealand, which means they don’t have to follow the usual restrictions – and that means you’ll only need a 5% deposit at the current time. They’re not available from all banks, though, so talk to your mortgage adviser if you’re hoping to apply for one. As with the First Home Grant, there are caps on your income and the value of the home you can purchase:

• You must earn less than $85,000 before tax annually (or combined household income less than $130,000 for two or more people);
• You can use the grant to purchase an existing or new home up to a maximum value, which varies depending on where in the country you are purchasing.
• You must be 18 years or over;
• You must have a deposit of at least 5% of the purchase price (this can include a First Home Grant);

You must be purchasing the home to live in, not as an investment property, and you must not own any other property. These loans are only available to first-home buyers OR those who have previously owned a home but are in a similar financial position to a first-home buyer.

Contact the Loan Market Paramount team today to find out whether any of these options could be just what you need to get into your first home faster!