Get the kids into homes

Deposit help from KiwiSaver and Kāinga Ora

Kiwisaver isn’t just a means for your children to establish some savings for retirement. It can also get them into their first home faster.

Here are three ways Kiwisaver and Kāinga Ora grants or loans can help get your children on the property ladder. Let's have a look at the options:

KiwiSaver first home withdrawal

Features

They can withdraw some or (almost) all of their KiwiSaver funds to put towards their deposit or settlement of the property.

If they are a first home buyer, they can apply for withdrawal of funds directly through their KiwiSaver provider.

If they are buying a property with someone else, and they’ve been a KiwiSaver contributor for at least three years, they can also apply for the KiwiSaver first home buyer withdrawal. This will boost the deposit or the funds available for settlement.

Eligibility criteria

To qualify, they must:

have three years minimum membership of a KiwiSaver scheme
buy a home or land in NZ
intend to live in that home or on the land they buy. It cannot be bought for a rental or investment property.
not have owned a home or land before
have not made a KiwiSaver first home withdrawal before
leave $1000 in their account after withdrawal so their KiwiSaver account remains active.

Points to consider

Not all KiwiSaver funds allow withdrawals for this purpose, so they need to check with their provider first.

Withdrawal of funds from their KiwiSaver account to buy a property is a one-time-only deal. This means that they can’t withdraw an amount from their fund for the deposit and then make another withdrawal for settlement of the property. This will need to be kept in mind when deciding on the amount to withdraw.

Kāinga Ora First Home Grant

Features

This is a one-off payment from the government to put towards a house purchase. They can choose between a pre-approval grant (valid for six months so they can start looking) or a full-approval grant (if a home has been found and they have a signed sale and purchase agreement).

The amount of the grant will vary depending on how long they’ve been contributing to KiwiSaver and whether they’re buying an existing property or a new build (this also includes the purchase of land).

Existing property grant

3 years contribution: $3,000 (min.)
4 years contribution: $4,000
5+ years contribution: $5,000 (max.)

New build (or land) grant

3 years contribution: $6,000 (min.)
4 years contribution: $8,000
5+ years contribution: $10,000 (max.)

Two or more borrowers can combine their first home grants. For example, a couple who’ve both contributed to KiwiSaver for five years could be eligible for grants totalling $20,000.

If the pre-approval grant expires before they’ve bought a property, they will need to re-apply for it.

Eligibility criteria

To qualify, they must:

have three years minimum membership of a KiwiSaver scheme
buy a home or land in NZ
intend to live in that home or on the land they buy. It cannot be bought for a rental or investment property.
have earned $95,000 or less (before tax) in the last 12 months as a sole applicant
have earned $150,000 or less (before tax) in the last 12 months as joint or multiple applicants

Points to consider

The maximum amount they can borrow will depend on the region in which they intend to buy, and whether it’s an existing home or will be a new build. Full details of these regional price caps are available on the Kainga Ora website.

First Home Loan

Features

Offered by selected NZ banks and loan providers, the First Home Loan product allows for a smaller deposit (5% instead of the standard 20%) when buying their first home.

This product is underwritten by Kainga Ora, allowing banks and loan providers to lend more for the desired property.

Eligibility criteria

To qualify, they must:

meet the loan requirements set out by Kainga Ora
meet the lending requirements of the selected bank or loan provider.

Points to consider

Buying a property with a smaller deposit (5% deposit) generally means a higher loan amount and a higher repayment amount.

Over the life of the loan, there may be extra fees due to the smaller deposit size and the additional time it will take them to repay.

Useful Links

Kāinga Ora