🏠 First Home Buyer Guide - New Zealand

Buying your first home in New Zealand involves understanding deposits, LVR ratios, KiwiSaver HomeStart grants, borrowing capacity, and the complete purchase process. This guide walks you through every step from saving to settlement, with real NZ examples and costs.

The Complete Cost Breakdown

Example: Purchasing a $650,000 home

Cost Item	Amount	Notes
Purchase price	$650,000	Agreed sale price
Deposit (20%)	$130,000	Your savings + KiwiSaver
Mortgage amount	$520,000	What you borrow
Legal/conveyancing	$2,000	Lawyer fees
Building report	$650	Pre-purchase inspection
LIM report	$300	Council property info
Valuation	$800	Bank requirement
Moving costs	$1,500	Truck/movers
Initial setup	$3,000	Appliances, furniture
Total cash needed	$138,250	Deposit + costs

Deposit Requirements

Standard Deposit (Existing Homes):

New Build Deposit:

Loan to Value Ratio (LVR)

LVR is the percentage you borrow vs property value:

LVR Level	Deposit	Implications
80% LVR	20%	Standard lending, best rates, no LMI
85% LVR	15%	Low equity, LMI applies (+0.5-0.75% rate)
90% LVR	10%	Low equity, higher LMI (+0.75-1.00%)
95% LVR	5%	New builds only, high LMI

KiwiSaver HomeStart Grant

Government grant for first home buyers (not a loan, doesn't need repayment):

Grant Amounts:

Years in KiwiSaver	Existing Home	New Build
3 years	$1,000 per person	$2,000 per person
4 years	$2,000 per person	$4,000 per person
5+ years	$5,000 per person	$10,000 per person

Couple scenario: Both in KiwiSaver 5+ years buying new build = $20,000 grant!

Eligibility Requirements:

• Been in KiwiSaver 3+ years
• Contributed at minimum required rates
• First home purchase (or similar to first home buyer)
• Will live in the property
• Income under cap (singles $95K, couples $150K in Auckland; lower outside Auckland)
• Purchase price under cap ($700K Auckland, $600K elsewhere for existing; $875K Auckland, $750K elsewhere for new builds)

KiwiSaver Withdrawal

Can withdraw KiwiSaver savings (not employer/government contributions) for first home:

Borrowing Capacity

How much can you borrow? Banks assess:

Income Assessment:

Debt-to-Income (DTI) Ratio:

Servicing Calculation:

Banks stress-test at higher rates:

Ongoing Property Costs

Budget for these annual costs:

Cost	Annual Amount	Notes
Mortgage repayments	$35,000+	Depends on loan size
Rates (council tax)	$2,500-$4,500	Varies by location
Insurance	$1,200-$2,000	House + contents
Maintenance	$3,000-$6,000	1% of property value/year
Body corp (if applicable)	$2,000-$8,000	Apartments/townhouses

The Purchase Process

Step 1: Get Pre-Approved (4-6 weeks before house hunting)

• Approach multiple banks for pre-approval
• Provide income proof, deposit evidence, ID
• Get approved amount in writing
• Pre-approval typically lasts 90 days

Step 2: Find Your Property (2-6 months)

• Attend open homes
• Research suburb prices, schools, transport
• Check property history (homes.co.nz, QV)
• Don't rush - average search takes 3-4 months

Step 3: Make an Offer (1-2 weeks)

• Submit offer through agent or directly
• Include conditions: finance, building report, LIM
• Typical condition period: 10-15 working days
• Negotiate price and terms

Step 4: Due Diligence (10-15 days)

• Order LIM from council ($300, 10 working days)
• Book building inspection ($500-$800)
• Confirm finance with bank
• Review all reports carefully
• Renegotiate or withdraw if issues found

Step 5: Go Unconditional (Day 1 after conditions met)

• Remove all conditions once satisfied
• Pay deposit (usually 10% of purchase price)
• Deposit held in trust until settlement
• Sale becomes binding

Step 6: Settlement (20-30 days after unconditional)

• Bank pays balance to vendor's lawyer
• You pay remaining costs to your lawyer
• Keys collected on settlement day
• Property officially yours!