October 3, 2025

Tips to Help First‑Time Buyers Get on the Property Ladder

Buying your first home should be exciting, not overwhelming. As Wellington‑based mortgage advisers who work with clients across New Zealand, we help first‑home buyers organise smart finance, and avoid costly pitfalls. Here’s a practical game plan to get you on the property ladder.

1) Build a deposit plan that actually works

• Use KiwiSaver wisely. Talk to your kiwisaver provider early so the money’s ready when your offer is accepted. If you’ve been in KiwiSaver for at least 3 years, you can usually withdraw nearly everything except $1,000, but you can not withdraw any Australian‑transferred super if you have any. 
• Consider a First Home Loan (5% deposit). Kāinga Ora underwrites First Home Loans through participating banks, meaning eligible buyers may only need a 5% deposit (lenders still apply normal affordability tests). Note that applications submitted after 1 July 2025 face a higher insurance premium (1.2% of the loan) set by Kāinga Ora. 
• Top up with gifts or deeds of debt. Family gifts are common, and only require a signed gift letter. 

Important information: The First Home Grant ended on 22 May 2024, no new applications were accepted (existing approvals may still be honoured on a case by case basis). 

2) Get a good handle on the bank rules so there are no surprises

Banks assess two big risk settings set by the Reserve Bank:

• LVR (Loan‑to‑Value Ratio): For owner‑occupiers, borrowing over 80% LVR is considered “high‑LVR” and sits under a speed‑limit cap; for investors, over 70% LVR is high‑LVR. There are exemptions though such as new‑build/construction loans and Kāinga Ora loans. In practice that’s why most buyers aim for a 20% deposit or use exemptions where appropriate. 
• DTI (Debt‑to‑Income): Since 1 July 2024, banks must also limit “high‑DTI” lending. As a guide, borrowing above 6 times gross income for owner‑occupiers is considered high‑DTI (banks can only do a portion of lending above this), and above 7 times for investors. Your actual approval still depends on full affordability checks.

3) Make your application look great

• Tidy statements. Minimise Afterpay and other “Buy Now Pay Later”, avoid overdrafts, and reduce unused credit card limits as the bank counts the limit, not just your balance.
• Stabilise income. Consistent hours, permanent employee contract or clear self‑employed financials help.
• Tackle short‑term debt. Paying off a car loan or credit card can noticeably lift your borrowing power under DTI rules. 

4) Target properties that improve your odds

• New builds can help. Many new‑build or construction loans are exempt from LVR limits, which can make low‑deposit approvals more achievable (of course always subject to bank policy). Purchasing from a developer within six months of completion can also qualify and is a good way to go for First Home Buyers.
• Widen your search. Consider neighbouring suburbs with better value, or properties with potential to add value over time.

5) Get pre‑approved before you house‑hunt

A pre‑approval clarifies your budget, sharpens negotiation, and flags any issues early (for example, a DTI pinch point or an undervaluation). We’ll guide you through the paperwork and structure your application so it’s lender‑ready.

6) Work with a broker who lives and breathes this stuff

We compare lenders, negotiate rates and cash contributions, and map out a structure that fits your life, not just the loan. From KiwiSaver withdrawals to the right loan type, we’ll help you move confidently. Talk to Capital Advice, your local mortgage advisers in Wellington,

Ready to get your deposit strategy and pre‑approval sorted? Talk to Capital Advice, your local mortgage advisers in Wellington, helping first‑home buyers NZ‑wide. 

Frequently Asked Questions for First-Home Buyers in NZ

How much deposit do I need as a first-home buyer in New Zealand?

Most lenders prefer a 20% deposit, but some eligible buyers may be able to purchase with as little as 5% using a Kāinga Ora-backed First Home Loan. Approval still depends on full affordability checks and lender criteria.

Can I use KiwiSaver for my first home deposit?

Yes. If you’ve been in KiwiSaver for at least three years, you can usually withdraw most of your savings (except $1,000). Note that Australian-transferred super funds cannot be withdrawn. It’s important to talk to your KiwiSaver provider early so the money is ready when your offer is accepted.

Is the First Home Grant still available in New Zealand?

The First Home Grant closed to new applications on 22 May 2024.

What are the LVR and DTI rules first-home buyers should know?

 

For owner-occupiers, borrowing over 80% LVR is classed as “high-LVR” and is capped by Reserve Bank rules. Since 1 July 2024, banks must also limit high-DTI lending and borrowing above 6 times gross income for owner-occupiers (7 times for investors). Your lender will also run affordability checks.

Do new-build properties help first-home buyers with low deposits?

Yes. Many new-build or construction loans are exempt from LVR limits, making it easier to qualify with a lower deposit. This is still subject to bank policy and affordability tests.

Can I use gifts or savings to top up my deposit?

Yes. Family gifts are common, but you will need a signed gift letter. Keep your savings in your own account and avoid moving money between accounts just before applying, to make the paper trail clear for the bank.

How can I make my mortgage application stronger as a first-home buyer?

Keep bank statements tidy, avoid Buy Now Pay Later services and overdrafts, actually avoid all short term liabilities, reduce unused credit card limits, stabilise your income, and consider paying off short-term debts like car loans or credit cards to boost borrowing power.

Should I get a pre-approval before house-hunting?

Yes. Pre-approval clarifies your budget, highlights any issues early (like DTI limits), and strengthens your negotiating position. A mortgage broker can help structure your application so it’s lender-ready.

Why work with Capital Advice for my first-home loan?

We compare lenders, negotiate rates and cash contributions, structure your loan to fit your lifestyle, and guide you through KiwiSaver withdrawals, exemptions, and paperwork—so you can buy with confidence.