Getting financially ready
Buying a new home is a big financial undertaking, so when you start out it is important to have a good understanding of your financial circumstances, as well as the obligations and requirements that buying a home involves.
Working out a budget
Creating an initial budget will help you narrow down your options with what you can afford, set savings goals, and give you an idea of how much you may need to borrow in order to buy a home. You’ll need to know:
- Your household income versus your spending
- How much of a deposit you will need
- What your ability to service repayments on a mortgage is
- If you’re planning on using your KiwiSaver
- Any other assets or equity you may have
A mortgage calculator(external link) can help give you a breakdown of what a home loan might look like based on the loan amount, interest rate, term of the loan and repayment schedule. You can also speak directly with a bank, lender or mortgage broker who will assess your personal circumstances and help you understand your options.
For more budgeting tools visit sorted.org.nz. (external link)
Getting a pre-approved home loan
A home loan or mortgage is the money you borrow from a bank or other lender in order to buy a home. Having a pre-approved home loan lets you understand your potential buying power and what you may be able to borrow from a bank or lender. This will:
- Give you a price range you are able to buy a home in
- Show sellers and real estate agents that you're serious about buying
- Speed up the process for getting full loan approval when you've found a home you want to buy
Your pre-approval will expire after a set period of time (e.g. three months). If your financial situation changes you should speak with your bank, lender or mortgage broker to update your circumstances.
Learn more about what questions you should ask when speaking to a bank, lender or broker at sorted.org.nz/questions-to-ask-a-lender.(external link)
Government financial assistance
Kāinga Ora – Homes and Communities also offers first home ownership financial support products for first home buyers that you can check your eligibility for.
The First Home Grant provides first home buyers with a grant of up to $10,000 per person, up to a maximum of $20,000, to put toward the purchase of a new home. You will need to have made regular contributions to a KiwiSaver fund for at least 3 – 5 years in order to be eligible.
Find out more at kaingaora.govt.nz/first-home-grant(external link)
First Home Loans are issued by select banks, building societies and credit unions, and underwritten by Kāinga Ora. They are designed to assist first home buyers who may be able to service a mortgage but not have the savings up front to provide a full deposit.
Find out more at kaingaora.govt.nz/first-home-loan(external link)
If you have been a contributing member of a KiwiSaver scheme for at least three years, you may be able to withdraw all, or part, of your savings to put towards buying your first home. Check with your fund provider to see if they permit withdrawals for this purpose.
Find out more at kaingaora.govt.nz/kiwisaver-first-home-withdrawal(external link)
Disclaimer: The First Home Grant, First Home Loan and KiwiSaver first-home withdrawal are not administered by KiwiBuild. Please refer to the corresponding eligibility criteria with Kāinga Ora to check if they are applicable to you. A successful application for KiwiBuild eligibility does not guarantee a successful application for other financial products.
Page updated: 30 March 2023