First Home Buyer · 6 July 2026
The Kāinga Ora First Home Loan can get eligible first home buyers into a home with a 5% deposit. Here is who qualifies, the income caps, and how it stacks up against a standard low-deposit bank loan.
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The First Home Loan is a government-backed scheme that lets eligible New Zealand first home buyers borrow with a 5% deposit, rather than the 20% most banks look for on an owner-occupier loan. It is administered by Kāinga Ora and issued through a panel of participating banks and lenders (Source: Kāinga Ora).
The mechanism is simple. Kāinga Ora underwrites, or guarantees, part of the loan to the lender. That guarantee covers the extra risk a bank normally carries on a low-deposit mortgage, which is why a participating lender can approve a loan that would otherwise sit outside its usual lending standards (Source: Kāinga Ora). The bank still assesses your application and makes the final call, so you also need to meet its own lending criteria.
Low-deposit lending exists because banks operate inside the Reserve Bank's loan-to-value restrictions, which limit how much low-deposit lending they can write (Source: Reserve Bank of New Zealand). Schemes like the First Home Loan create room within those rules for buyers who can afford the repayments but have not yet saved a full 20% deposit.
You contribute at least 5% of the purchase price. For many first home buyers, KiwiSaver makes up a large part of that. Some or all of the deposit can also be a genuine family gift.
Kāinga Ora backs the loan to the lender. You still borrow from, and repay, a normal bank at normal home loan interest rates.
Eligibility is set by Kāinga Ora and checked by the lender. In broad terms, to qualify you need to be:
There are also income caps, based on your gross (before tax) income over the last 12 months (Source: Kāinga Ora):
The First Home Loan is not the only way to buy with less than a 20% deposit. Banks also write their own low-deposit lending, and there are separate rules for new builds. The right route depends on your income, your deposit, and the total cost over time. This is where most online guides stop short: they explain the scheme in isolation without weighing it against the alternative.
The biggest difference is how the low-deposit cost is charged. On a standard bank low-deposit loan, lenders often add a low equity margin or premium, which is typically an ongoing charge each year until you reach 20% equity (Source: Canstar NZ). The First Home Loan instead carries a one-off Kāinga Ora Lender's Mortgage Insurance premium of 1.2% of the loan amount, which can be paid upfront or added to the loan (Source: Kāinga Ora).
Neither option is automatically better. A buyer inside the income caps may find the First Home Loan cheaper over time because the low-deposit cost is a single premium rather than an ongoing margin. A buyer above the caps, or one with a slightly larger deposit, may be better served by standard bank lending. In our experience at Trebla, the deciding factors are usually the size of your deposit today, whether your income sits under the caps, and how long you expect to take to reach 20% equity.
It is also worth clearing up a common mix-up. The First Home Grant, which was a cash contribution towards a first home, closed to new applications on 22 May 2024 and is no longer available (Source: Kāinga Ora). The First Home Loan covered here is a separate scheme and is still running.
The First Home Loan lets eligible first home buyers borrow with a 5% deposit, instead of the 20% most banks look for. The Kāinga Ora guarantee to the lender is what makes the low-deposit loan possible.
Based on your gross income over the last 12 months: $95,000 or less for a single buyer with no dependants, $150,000 or less for a single buyer with one or more dependants, and $150,000 or less combined for two or more buyers (Source: Kāinga Ora). Caps are reviewed periodically, so confirm the current figures at kaingaora.govt.nz before you apply.
No. The First Home Grant closed to new applications on 22 May 2024 and is no longer available. The First Home Loan is a separate scheme that is still running and helps eligible buyers borrow with a 5% deposit.
Some or all of your 5% deposit can be a genuine gift from family, subject to the lender's requirements. A Financial Adviser can explain how a gifted deposit is documented and treated by different lenders.
First Home Loans are issued by a panel of selected participating lenders and underwritten by Kāinga Ora. The current list is published on kaingaora.govt.nz. The lender, not Kāinga Ora, makes the final approval decision against its own lending criteria.
House price caps were removed from the First Home Loan in 2022, so there is generally no maximum property value tied to the scheme. Your borrowing is limited instead by the lender's servicing test and standard lending rules. Always check the current settings at kaingaora.govt.nz.
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This article is general in nature and is not financial advice. Lending criteria, lender policies, and relevant rules vary and change regularly. Always seek advice specific to your situation before making decisions. Read our disclosure statement →
