First Home Buyers: Insights from our Meetings

Ready to buy your first home but not sure where to start? We get it — the process can feel overwhelming. That's why we built this page as a clear roadmap, breaking down the entire journey into simple, manageable steps.

Think of this page as an extension of our first-home meetings — except everything is out in the open, ready for you to browse. The better prepared you are, the easier the borrowing and home buying process will be.

Getting Your First Home Deposit Together

Think of your deposit as a way to get your foot in the door with banks. It can come from KiwiSaver, savings, investments, gifts from family or bonuses.

Aim for 20% of the house price if you're buying an existing home, or 10% if you're buying a new build. High-income earners with minimal debt may secure lending with as little as 5%. The size of your deposit affects the interest rates you're offered — generally, larger deposits mean better rates.

For example, a new build apartment at the median price in Auckland central may only need a 10% deposit of around $55,000. An existing home at the median price in Birkdale on the North Shore may need closer to 20%, or $195,000.

The Deposit Trade-Off

A smaller deposit allows you to get into the market sooner, and if the market is trending upward your home could appreciate in value while you're still saving. On the other hand, a smaller deposit may result in higher interest rates and additional lending conditions.

Using KiwiSaver for Your Deposit

If you've been contributing to KiwiSaver for at least three years and meet eligibility criteria, you may be able to use your entire balance (less $1,000) to purchase a home. It'll take at least 10 working days for funds to be paid out after your application, but delays can happen.

Arrange a 15+ day conditional period if you plan to use your withdrawal as part of your deposit. If using KiwiSaver as part of your settlement funds, allow a longer settlement (5–6 weeks). Note: if buying at auction, you won't be able to use your KiwiSaver withdrawal as part of your deposit — you need a signed sale and purchase agreement first.

How Much Can You Borrow?

The amount you can borrow is based on your deposit size, income, expenses and investments. Banks care about your income and expenses because they want to know you can afford repayments. Certain debts count against you, and banks stress-test your application at rates up to 2% higher than the real rate.

As a rough guide, if you're currently saving $2,000 per month and paying $2,000 in rent, you may be able to afford repayments on a $500,000+ loan at current rates and stress testing (approximately $4,000 per month in repayments).

Since July 2024, the Reserve Bank's Debt-to-Income Ratios (DTIs) restrict first home buyers to borrowing six times their income. For example, if you earn $100,000 you can borrow a maximum of $600,000. If you earn $50,000, that's a maximum of $300,000.

Note that bank servicing requirements typically allow less borrowing than DTI limits, so the DTI cap may not be the binding constraint for most buyers.

Not Quite Ready to Buy Yet?

If you're looking at deposit requirements and thinking 'I'm not ready yet,' that's OK. It's a great idea to speak to a mortgage broker at this stage to create a plan of action. Something as small as increasing your KiwiSaver contributions to 8% can mean you're ready to buy years sooner.

Your KiwiSaver Contributions

Regular, small investments add up significantly over time. Something as simple as increasing your KiwiSaver contributions to 8% of your salary can mean you're ready to buy years sooner than you expected.

Make Sure You're in the Right KiwiSaver Fund

Choose your fund based on how long you have until you plan to buy. If you have seven-plus years, consider a high growth or aggressive fund. Planning to buy in 1–3 years? A defensive or conservative fund may be better to protect your balance from short-term market volatility.

Higher growth investments tend to trend upward over time but can be volatile in the short term. The longer your timeframe, the more you can ride out any downturns.

If you're still in a default fund, we have investment advisors available for a free consultation. See our KiwiSaver planning service.

Savings Accounts and Term Deposits

If you're not planning to buy for a couple of years, make sure your savings are still earning interest in the meantime. Setting up a separate savings account reduces the temptation to dip into your deposit fund, and automatic monthly transfers demonstrate the kind of financial discipline lenders love to see — it shows you can commit to regular payments, just like a mortgage.

Making Your Application Attractive

Before you apply, do some financial housekeeping to give yourself the best chance of approval.

Pay down bad debt: When a bank assesses your application, debts like car loans, personal loans and credit cards count against you. Reducing these before you apply increases your borrowing power.

Clean up your financial habits: Banks will review your last three months of account statements. During this period, avoid unarranged overdrafts, missed payments, and any unusual spending. Keep your expenses low and consistent — avoid large one-off purchases, new debt, gambling transactions, or shopping sprees. Demonstrate that you're mortgage-ready.

Protect your credit score: Your credit score is a single number that reflects your trustworthiness as a borrower. A poor credit score can lead to higher interest rates, lending denial, or require you to explain negative entries to the bank. Check your score before applying and address any issues.

Comparing Available Rates

Your interest rate makes up the vast majority of your home loan's cost. A rate that's just 0.2% lower on a $500,000 loan can save you almost $23,000 over 30 years:

• 3.0% on $500,000 = $255,539 interest — total cost $755,539
• 3.2% on $500,000 = $278,458 interest — total cost $778,458
• 3.4% on $500,000 = $301,833 interest — total cost $801,833

Working with a mortgage broker means you'll know exactly what's available across all lenders and can secure the most competitive rate for your situation.

First Home Purchase Cashback Rates

Many banks provide a lump-sum cash incentive when you take out a new mortgage — typically $3,000–$5,000 or a percentage of the loan. Cash back agreements usually require you to stay with the bank for 2–3 years. If you leave before the commitment period ends, you'll need to repay the cash back. After the period ends, you can switch banks for a new cashback offer or negotiate with your existing lender.

Interest Rate Averaging

Choosing the right fixed rate involves predicting where rates are headed — which is notoriously difficult. One proven alternative is to split your mortgage into portions with different fixed rates, keeping your repayments fairly consistent regardless of rate movements.

For example, with a $500,000 mortgage you could structure it as:

• $160,000 fixed for 1 year
• $160,000 fixed for 2 years
• $160,000 fixed for 3 years
• $20,000 on revolving credit

This way, only a portion of your mortgage refixes at any one time, smoothing out the impact of rate changes.

Revolving Credit

A revolving credit facility turns part of your mortgage into a big overdraft. You can deposit and withdraw money freely up to a set limit, and you only pay interest on the amount you've actually used. This can be a great way to pay your mortgage off faster — for example, you could set up a $20,000 revolving credit, pay it down fully, then reduce your mortgage by that amount and repeat. Just be disciplined, because the easy access to funds can work against you if you're prone to spending.

Offset Account

An offset account is a savings account linked to your mortgage. Money in this account directly reduces your mortgage balance for interest calculation purposes. For example, if your mortgage is $500,000 and you have $100,000 in your offset account, you'll only pay interest on $400,000. The return is often better than a term deposit, especially since the savings aren't taxed.

Review Your Mortgage Regularly

Once you've got a mortgage, check it at least once a year — or every time your fixed rates come up for renewal — to make sure it still suits you. It's also smart to review after big life changes: a new job, a new family member, or a pay rise.

Consider keeping your repayments the same when rates decrease — this accelerates your payoff without changing your budget. And remember, switching lenders regularly can unlock fresh cashback benefits.

Blueprint Finance provides 60-day pre-renewal notifications to ensure your mortgage continues to support your goals.

DISCLAIMER: The information contained in this page is general in nature. While facts have been checked, this information does not constitute a financial advice service. The article is only intended to provide general information about home loans. Nothing in this article constitutes a recommendation that any strategy is suitable for any specific person. Before making financial decisions, we highly recommend you seek professional advice.