Buying your first home is one of the biggest financial steps you'll ever take, and the rules in New Zealand keep changing. This guide walks you through how the process works in 2026 — from saving a deposit to getting the keys — so you can move forward with confidence.
1. Work out how much deposit you need
Most banks prefer a deposit of 20% of the purchase price for owner-occupiers. You can often buy with less, because the Reserve Bank's loan-to-value (LVR) rules let banks place a share of their lending above 80%. From 1 December 2025 the Reserve Bank eased these settings, allowing banks to write up to 25% of new owner-occupier lending to borrowers with less than a 20% deposit.
In practice that means low-deposit lending is possible, but it is competitive and usually comes with a slightly higher interest rate or a low-equity premium. The larger your deposit, the more options and sharper rates you'll have.
2. Make the most of KiwiSaver
If you've been a KiwiSaver member for at least three years, you can usually withdraw most of your balance to put towards a first home, provided you leave a minimum of $1,000 in the account. For many first home buyers, KiwiSaver is the single largest source of their deposit.
Note that the former First Home Grant (the HomeStart grant) was discontinued in May 2024 and is no longer available. The KiwiSaver first-home withdrawal is separate and still available.
3. Consider the First Home Loan
The First Home Loan, underwritten by Kāinga Ora, lets eligible buyers purchase with a deposit as low as 5% through participating lenders. Income and regional house-price caps apply, so it won't suit everyone — but for buyers with a smaller deposit it can be the difference between buying now and waiting years.
4. Understand how much you can borrow
Two sets of rules shape your borrowing power:
- Debt-to-income (DTI) limits. Since mid-2024, banks generally treat lending above six times a household's gross income as high-DTI for owner-occupiers, with only a limited share of lending allowed to exceed that.
- Serviceability testing. Banks don't assess you at today's rate — they stress test your loan at a higher rate (commonly around 8%) to make sure you could still afford repayments if rates rose.
Because of this, the amount you can borrow is often lower than online calculators suggest. A mortgage adviser can help you understand your real position before you start looking.
5. Get pre-approval before you shop
A pre-approval tells you how much a lender is willing to advance, so you can shop within budget and make offers with credibility. Pre-approvals are usually conditional and time-limited (often around 90 days), so it pays to be genuinely ready to buy when you apply.
6. Find the property and do your due diligence
Once you're pre-approved, you can start making offers. Before you commit, factor in the full picture: a builder's report or LIM, insurance, legal fees, and a buffer for moving and settling in. If you're buying at auction, remember that auction sales are typically unconditional — so your finance and checks need to be sorted first.
7. Settlement and beyond
After your offer goes unconditional, your lawyer and lender handle settlement, and the property becomes yours on settlement day. From there, the focus shifts to structuring your loan well — choosing fixed or floating terms, and reviewing your rate as fixed periods roll off.
A quick word on interest rates in 2026
As at mid-2026 the Official Cash Rate is 2.25%, and competitive one-year fixed home loan rates sit broadly in the high-4% range. Rates change regularly, so the right structure for you depends on your circumstances and the market at the time you borrow.
How Borro Finance can help
As mortgage advisers, we work with a range of lenders to help first home buyers understand their options, structure their deposit, and get to pre-approval. If you'd like to talk through your situation, get in touch — there's no cost to have a conversation.
This article is general information only and is current as at June 2026. It is not personalised financial advice and does not take your individual circumstances into account. Lending criteria, interest rates, government schemes and Reserve Bank rules can change at any time. Please seek advice from a licensed financial adviser before making any decisions.