Kainga Ora First Home Loan: 5% Deposit Guide for NZ

Saving a 20% deposit for a first home in New Zealand can feel like running a marathon with no finish line in sight. For many Kiwi buyers, the Kāinga Ora First Home Loan makes that goal more achievable: you can borrow with just 5% saved, backed by government underwriting that removes the usual lender risk. The catch is that eligibility comes with strict income caps and a limited window of participating banks to choose from.

Minimum deposit: 5% · Income cap (single, no dependants): $95,000 · Income cap (with dependants): $150,000 · Underwriting body: Kāinga Ora · Participating banks: 7 lenders including ASB, Westpac, Kiwibank

Five facts anchor the eligibility framework for the First Home Loan scheme.

Does Kainga Ora still have 5% first home deposit in NZ?

Yes — the Kāinga Ora First Home Loan remains active, allowing eligible first-home buyers to purchase property with just a 5% deposit (Kāinga Ora Official). For context: on a $600,000 home, that means gathering $30,000 instead of the $120,000 a standard 20% deposit would require.

Kāinga Ora acts as guarantor behind the scenes, which reduces the lender’s risk and allows banks to accept deposits that would otherwise be deemed too low. This government underwriting is the core mechanism that makes the scheme work (Luminate).

Availability status

The scheme runs through seven participating lenders — not every bank in New Zealand offers it. ASB joined relatively recently, expanding options for applicants (Luminate). The current list of providers changes as banks join or leave, so checking the Kāinga Ora website before applying is worth doing.

Property price caps

Regional price caps were removed from the First Home Loan in 2022, which means there is no longer a maximum property value threshold to track (One Stop Financial). Previously, caps ranged from $400,000 to $950,000 depending on region, with Auckland at the higher end.

The implication: buyers are no longer blocked by regional price ceilings, but lenders still apply their own credit criteria and debt-to-income ratio assessments. Property must be fee simple (freehold) to qualify — leasehold properties are not eligible.

Who is eligible for a first home loan NZ?

Eligibility hinges on three pillars: income thresholds, first-home-buyer status, and New Zealand residency. Income caps are rigid — earning one dollar over the limit disqualifies an application with no discretion available (MoneyHub).

Income thresholds

• Single applicant without dependants: $95,000 or less (gross annual income from the last 12 months)
• Single applicant with one or more dependants: $150,000 or less
• Two or more buyers (combined): $150,000 or less, regardless of dependants

Income is assessed on before-tax (gross) figures from the most recent 12-month period. There is no minimum income requirement, but your total household income must be sufficient to meet the lender’s debt-to-income ratio calculations (Kāinga Ora Official Brochure).

First home buyer rules

You must be a first home buyer, or a previous home owner in a financial position similar to a first home buyer. You cannot own any other property or land at the time of application — Māori land ownership is an exception. The property must be your primary place of residence and you must intend to live in it as owner-occupied (Kāinga Ora Official).

The pattern across these requirements is consistent: the scheme targets buyers who can service a mortgage but lack the savings buffer that traditional lenders demand.

Can I buy a house in NZ with a 5% deposit?

Yes — through the First Home Loan specifically, you can buy with a 5% deposit. This is considerably lower than the standard 10–20% most banks require for a standard home loan. Standard bank loans also typically charge low-equity fees of $500–$2,000+ that do not apply to First Home Loans (Luminate).

New build options

New builds are a strong fit for the scheme. Acceptable deposit sources include KiwiSaver withdrawals (your balance minus $1,000), personal savings, and family gifts — provided they are non-repayable and documented. Some developers offer cashback incentives for new builds that can also count toward your deposit (Luminate).

Existing home limits

Existing properties are eligible, but the property type must be fee simple (freehold). Unit titles and leasehold properties typically do not qualify. Lenders scrutinize deposit sources carefully and require all funds to be legitimate and fully documented — borrowed money, funds expected to be repaid, and sudden unexplained deposits are all rejected (Luminate).

What this means: the 5% threshold is achievable for many buyers, but the deposit must be assembled from approved sources and verified through bank-grade documentation.

What are Kāinga Ora First Home Loan conditions?

The First Home Loan uses standard bank interest rates — Kāinga Ora does not set a separate rate. Your participating lender quotes the prevailing market rate, and the government guarantee covers the low-deposit risk. Kāinga Ora contributes up to $200,000 or 25% of the purchase price (whichever is lower) as part of the deposit structure (Squirrel).

Interest rates

Interest rates are set by each lender and will vary. The scheme does not offer a subsidized rate — you receive the lender’s standard home loan rate, but with the benefit of a government-backed guarantee that lets you proceed with only 5% deposit. This means you avoid costly low-equity fees while accessing the same pricing as other borrowers.

Repayment rules

Repayments follow standard mortgage terms. Debt-to-income ratio rules apply across New Zealand, meaning lenders assess your borrowing capacity based on income, expenses, and existing debts (One Stop Financial). Each participating lender also applies its own credit criteria in addition to the government-set eligibility requirements (Kāinga Ora Official).

The catch: meeting the government eligibility bar does not guarantee approval. Your bank still runs its own credit assessment, and the bank’s criteria can be stricter than the baseline Kāinga Ora requires.

Which banks offer Kāinga Ora First Home Loan?

Seven lenders currently participate in the scheme. The main providers include Westpac, Kiwibank, The Cooperative Bank, and SBS Bank, along with selected building societies and credit unions (Taylor Shaw). ASB is among the more recent additions to the program.

ASB and others

ASB’s participation marked a notable expansion of the scheme, given its size in the New Zealand banking market. Other lenders operate at a smaller scale but may offer more personalized service for complex situations. Checking the current lender list on the Kāinga Ora official page before approaching any bank is the most reliable step.

How to compare

When comparing lenders, focus on three factors: interest rate offered, fees charged (if any), and the lender’s credit criteria beyond the government baseline. Each bank assesses your application independently, so approval at one bank does not guarantee approval at another. A mortgage adviser familiar with the scheme can help navigate these differences (MoneyHub).

The trade-off: some lenders may be more flexible with borderline cases, while others may apply the rules strictly. The scheme’s availability through multiple banks gives buyers some room to shop around.