First Home Buyer FAQ

The short answer: most first home buyers need between 10% and 20% of the purchase price. Here's how it actually breaks down:

Your borrowing power is determined by the lowest of three separate limits, not just income. A lot of buyers focus only on income and get surprised when they can't borrow as much as they expected.

Limit 1: LVR (Loan-to-Value Ratio)
The Reserve Bank limits how much banks can lend relative to the property value. The standard is 80% LVR, meaning you need at least a 20% deposit. Low-deposit options exist but reduce your options and add cost.

Limit 2: Debt-to-Income (DTI) Ratio
Since July 2024, the RBNZ limits owner-occupier lending to a maximum of 6 times your gross annual household income. This is a relatively new rule that many buyers and even some advisers haven't fully adjusted to.

Limit 3: Serviceability (stress test)
Banks don't assess affordability at today's rates. They test whether you could afford your mortgage repayments if interest rates rose by about 2–3% above current rates. With fixed rates currently around 4.65–5.29%, banks are typically stress-testing at approximately 7–8%. This is the limit that catches most people out.

What banks also look at:

• Income type: Salary is most reliable. Self-employed income requires 2 years of accounts. Bonuses and commission are usually counted at 50% only.
• Living expenses: Banks use either your declared expenses or a minimum benchmark (whichever is higher). For a couple this is typically $2,000–$2,500/month.
• Other debts: Car loans, personal loans, credit cards, student loans, buy-now-pay-later accounts. Critically, credit cards are assessed at their full limit, not what you actually owe.

The DTI rule is one of the newer lending restrictions in NZ (introduced July 2024) and it catches a lot of buyers off-guard. Here's how it works:

Your total debt, the new mortgage plus any existing debt, cannot exceed 6 times your gross annual household income for a standard owner-occupier purchase.

What counts as debt:

• The new mortgage you're applying for
• Any existing mortgages
• Car loans and vehicle finance
• Personal loans
• Student loans
• Credit card limits (not what you owe, the full limit)
• Some buy-now-pay-later balances

What counts as income: Gross (pre-tax) annual income from all verified sources.

Exceptions: Banks can lend above the 6× limit for up to 20% of new mortgage commitments, so there is some flexibility, but you can't rely on it. New builds and Kāinga Ora First Home Loans generally receive more favourable DTI treatment.

You have real options, just fewer than there were a couple of years ago. Here's what's currently available:

1. KiwiSaver First Home Withdrawal

If you've been in KiwiSaver for at least 3 years, you can withdraw almost all of your balance (leaving $1,000) toward your first home deposit. This is available regardless of your income or the property price. For many buyers, it's the single biggest contribution to their deposit.

2. Kāinga Ora First Home Loan (5% deposit)

The government underwrites your loan, allowing you to buy with just 5% down through a participating bank. Income caps apply ($95,000 single / $150,000 combined) and regional house price caps range from $600,000 to $875,000 depending on where you're buying.

3. Low Equity Lending (10–19% deposit)

Banks are permitted to write up to 25% of new owner-occupier mortgages to buyers with deposits under 20%. You'll pay a Low Equity Premium (typically 0.35–0.65% added to your interest rate) and have fewer lenders to choose from, but it's a real path if your income is strong.

4. New Build Advantage (10% deposit)

New builds are exempt from the LVR speed limits that apply to existing properties. This means you can buy a newly built home with as little as 10% deposit without the Low Equity Premium constraints. Worth exploring if you're open to this option.

5. Family Support

• Gifted deposit: A gift from family (no repayment expected). Banks require a statutory declaration confirming it's a gift, not a loan.
• Guarantor loan: A family member uses their property as additional security for your loan, allowing you to borrow with less deposit.
• Family loan: Borrowing from family counts as a liability in your application, banks will treat it as debt when assessing your DTI and serviceability.

It depends on your relationship, finances, and long-term plans, but here's the honest picture:

Advantages of buying together:

• Two incomes = more borrowing power. Two $65,000 incomes combined can borrow significantly more than one person earning $65,000.
• Split the deposit requirement, each person contributes less individually.
• Share ongoing costs: mortgage, rates, insurance, maintenance.
• Get into the market sooner.

The real risks:

• Relationship breakdown, what happens if one person wants to sell and the other doesn't?
• Different financial behaviour, one person overspends, the other is trying to save.
• Life changes, one person gets a job overseas, wants to start a family, wants to invest.
• Joint and several liability, both parties are responsible for the entire mortgage, not just half.

Our take:

• Buying with a committed romantic partner: Generally fine. A relationship property agreement is still a very good idea, it protects both of you.
• Buying with a friend or family member: Only proceed with a proper, lawyer-drafted property sharing agreement covering what happens if one person wants out, how disagreements are resolved, and how costs are split.
• Buying solo: Harder on borrowing power, but no complications and full control. Many people do it successfully.

It depends which support you're talking about:

KiwiSaver First Home Withdrawal: Generally no, this is for first home buyers who have never owned residential property before. However, Kāinga Ora assesses "second chance" applications on a case-by-case basis. If you're in a position comparable to a first home buyer, for instance, after a relationship separation where you lost your share of the property, you may still qualify. It's worth checking with Kāinga Ora directly.

Kāinga Ora First Home Loan: Same, you must not currently own any residential property in NZ or overseas. Previous owners may qualify under "second chance" criteria if their financial position is assessed as comparable to a first-time buyer.

Important nuance for couples: If you're buying with a partner, your KiwiSaver eligibility is assessed individually. So if you're a first home buyer but your partner has previously owned property, you can still withdraw your KiwiSaver toward the purchase, your partner cannot access theirs unless they meet the second-chance criteria.

No. The First Home Grant (KiwiSaver HomeStart Grant) was permanently closed by the New Zealand Government on 22 May 2024. There is no equivalent replacement grant.

This is one of the most common misconceptions we encounter. A lot of websites and articles still mention the grant, and social media advice from even just a year or two ago references it regularly. Please treat any source that describes the First Home Grant as available as out of date.

What this means for you: If you were counting on $5,000–$20,000 from the grant, you'll need to save that amount independently. The good news is that the other support mechanisms, KiwiSaver withdrawal and the First Home Loan, are still fully operational.

What's still available:

• KiwiSaver First Home Withdrawal, still fully available
• Kāinga Ora First Home Loan (5% deposit), still operating
• Family support (gifted deposits, guarantors)
• Low equity lending for buyers with 10%+ deposits

Yes, that's exactly what it's there for. The KiwiSaver first home withdrawal is one of the best tools available to first home buyers, and for many people it's the largest single chunk of their deposit.

What you can withdraw:

• ✅ All of your employee contributions
• ✅ All employer contributions
• ✅ All investment returns and growth
• ❌ The last $1,000 must stay in your account

Eligibility requirements:

• You've been a KiwiSaver member for at least 3 years (the clock starts from your enrolment date, not your first contribution)
• This is your first home, or you qualify under second-chance criteria
• You'll live in the property as your main home for at least 6 months
• The property is in New Zealand
• The property is residential, not commercial or a lifestyle block above certain size thresholds

How the process works:

1. Get your offer accepted and receive a signed Sale and Purchase Agreement
2. Your conveyancing lawyer submits the withdrawal application to your KiwiSaver provider on your behalf
3. Your provider verifies your eligibility and approves the withdrawal (typically 10 business days)
4. Funds are sent directly to your lawyer's trust account, not to you personally
5. Your lawyer holds the funds and uses them at settlement

Individual eligibility for couples: If you're buying with a partner, each person's KiwiSaver eligibility is assessed separately. If you're a first home buyer but your partner has previously owned a property, you can still withdraw your KiwiSaver, your partner cannot, unless they qualify under the second-chance criteria.

This is something a surprising number of people haven't thought about, and getting it wrong can cost you money. Here's a practical guide:

If you're unsure which fund you're currently in, log in to your KiwiSaver provider's app or website. Switching is usually free and takes a few days to process.

The most effective savings strategy combines automation, discipline, and optimisation, not willpower alone. Here's what actually works:

1. Open a dedicated home deposit account
Separate from your everyday account. A high-interest savings account with a slightly inconvenient access process (no instant transfer, short notice period) reduces impulse spending. Out of sight, harder to touch.

2. Automate transfers on payday
Set up an automatic transfer for the day your pay hits. "Pay yourself first", save before you see the money. Start with an amount that feels uncomfortable and you'll adapt to it faster than you think.

3. Maximise your KiwiSaver
As of 1 April 2026, the minimum KiwiSaver contribution rate increased to 3.5% (previously 3%). At a minimum, ensure you're getting the full employer match. If you can increase to 4%, 6%, or even 8%, that money compounds and gets withdrawn tax-efficiently at purchase time. Consider it a forced savings vehicle with a bonus, your employer's contribution.

4. Cut the four big deposit killers:

• Eating out and takeaways: $100/week = $5,200/year
• Daily coffee: $5/day = $1,825/year
• Subscription creep: Review all subscriptions monthly, they add up
• Lifestyle inflation: Every income increase that doesn't go straight to savings is lost time

5. Improve your savings rate gradually
You don't need to overhaul your entire life overnight. Increase your savings rate by 1% of income every couple of months. Over a year, that's a significant uplift with manageable adjustment at each step.

The Kāinga Ora First Home Loan is a government-backed scheme that lets eligible buyers purchase with as little as 5% deposit, where a standard bank would normally require 20%. Kāinga Ora underwrites the risk, allowing participating banks to lend to buyers who wouldn't otherwise qualify for a standard mortgage.

Eligibility criteria (as at August 2026):

• You must not currently own any residential property in NZ or overseas
• Income caps: $95,000 gross per year (single buyer) or $150,000 combined (two or more buyers)
• Minimum 5% deposit from savings, KiwiSaver withdrawal, or family gift
• Purchase property within the regional price caps (see below)
• A 1.2% insurance premium applies on top of standard loan costs

Regional property price caps (August 2026):

The timeline varies widely depending on your income, expenses, and target deposit. Here's a realistic framework:

Simple formula: (Target deposit) ÷ (Monthly savings) = Months to goal

Remember your KiwiSaver balance adds to these figures, it could contribute $20,000–$60,000+ depending on how long you've been contributing.

The home buying process follows a clear sequence. Most first home buyers take 3–12 months from first getting serious to getting the keys, depending on how quickly you find the right property and how competitive the market is.

1. Sort your finances: Work out your deposit (savings + KiwiSaver), understand your borrowing power, and address any credit issues or excess debt.
2. Get pre-approval: Apply for mortgage pre-approval before you start seriously looking. This confirms how much you can borrow and makes your offer more credible to sellers.
3. Engage a mortgage adviser: If you haven't already. They can access more lenders, often at better rates, and guide you through the whole process.
4. Find a property lawyer: Engage them early, you'll want a lawyer you trust before you're under time pressure with a signed agreement.
5. Start house hunting: Search Trade Me Property, real estate agency websites, and attend open homes. Be clear on your non-negotiables versus nice-to-haves.
6. Do your due diligence: Once you find a property you're serious about: order a LIM report, book a building inspection, and ask your lawyer to review the title and sale and purchase agreement before you sign.
7. Make an offer: Submit a written offer via the real estate agent. Your offer will typically include a price, proposed settlement date, and conditions (finance, building inspection, solicitor approval).
8. Conditional period: You have typically 5–15 working days to satisfy your conditions, confirm finance with your bank, complete your building inspection, and have your lawyer review everything.
9. Go unconditional: Once you're satisfied with everything, you remove your conditions. At this point the contract becomes binding, you cannot back out without significant legal consequences.
10. Pre-settlement preparation: Your lawyer lodges your KiwiSaver withdrawal request, your bank finalises the mortgage documents, and you arrange home insurance (required before settlement).
11. Pre-settlement inspection: You have the right to inspect the property before settlement to confirm it's in the same condition as when you signed.
12. Settlement day: Your lawyer handles the financial transactions, the title transfers to your name, and you collect the keys. You're a homeowner.

Yes, you absolutely need pre-approval before you make any serious offers.

Pre-approval (also called conditional approval) is a formal confirmation from a bank that they're willing to lend you up to a specified amount, subject to the property being acceptable to them and your circumstances not changing. It's not a guarantee of a final loan, but it's far more reliable than an estimate or verbal assurance.

Why it matters:

• You know your actual budget: Not a rough estimate, a real number based on your income, expenses, debts, and the bank's stress test.
• Sellers and agents take you seriously: An offer from a buyer with pre-approval is seen as significantly more credible than one without. In competitive markets, this matters.
• You can act quickly: When you find the right property, you don't lose it waiting to get finance sorted.
• Auction eligibility: Auctions are unconditional, you cannot bid without confirmed pre-approval and completed due diligence in place.

How to get pre-approval:

1. Gather your documents: payslips, bank statements (3–6 months), details of debts and credit cards, ID
2. Apply through a mortgage adviser (recommended, they compare multiple lenders at once) or directly with a bank
3. The bank assesses your income, expenses, and credit history
4. Typically issued within 2–5 working days for straightforward applications

How long does pre-approval last? Typically 60–90 days. If you haven't found a property within that window, you can often renew it, assuming your circumstances haven't changed.

A LIM (Land Information Memorandum) is an official report produced by the local council that contains all the information the council holds about a property and the land it sits on. It typically costs $200–$400 and takes up to 10 working days.

What a LIM report contains:

• Council rates and any outstanding amounts
• Building consents and completion certificates for any works done
• Resource consents, things like extensions or changes to the property
• Any notices, orders, or requisitions issued in relation to the property
• Drainage information (private and public)
• Flood plains and hazard information
• Heritage orders or other restrictions on the property
• Whether any work was done without the required consent

Do you need one? Yes, every time, no exceptions. A LIM report can reveal significant issues that aren't visible to the eye: unapproved additions to the building, a heritage designation preventing future renovation, flood risk, or ongoing disputes with the council. Missing something in a LIM report because you skipped it is an expensive way to learn this lesson.

Absolutely worth it, without exception. A building inspection by a registered building inspector costs $500–$900 and can save you tens of thousands.

What a standard inspection covers:

• Roof condition, materials, age, damage, leaks
• Foundation and subfloor, piles, drainage, rot
• Exterior cladding and joinery, weathertightness
• Interior, visible structural elements, signs of moisture, ceiling condition
• Electrical system (visual inspection)
• Plumbing (visible components)
• Outbuildings, garages, decks
• General compliance with building standards

What it doesn't cover:

• Hidden defects behind walls or under floors (unless invasive testing is done)
• Detailed electrical or plumbing assessment (specialist trade required)
• Weathertightness invasive testing (a separate specialist assessment)

Leaky building risk: Properties built between approximately 1992 and 2004 face an elevated risk of leaky building syndrome, a systemic weathertightness failure caused by building methods and materials common in that era. If the property you're looking at falls into this age range, consider commissioning a specialist weathertightness report on top of a standard building inspection. The cost of a leaky building repair can run into the hundreds of thousands of dollars.

Assessing whether a property is fairly priced takes a bit of research, but the tools are all available to you:

1. Research recent comparable sales
Trade Me Property and real estate agency websites show recent sale prices in the area. Look for properties that sold in the last 3–6 months with similar size, age, condition, and location. These are your most reliable indicators of current market value.

2. Check the council valuation (CV/RV)
The council rateable value is reassessed every 3 years and typically lags the real market, in rising markets it's often well below actual value; in falling markets it may be above. Use it as a reference point, not a definitive number. Properties routinely sell above or below CV.

3. Understand the local market dynamics
Is this a seller's market or buyer's market right now? Days on market (how long properties are listed before selling) and how many similar properties are available will tell you whether sellers have leverage or buyers do.

4. Get a registered valuation
A registered valuer will assess the market value of a specific property in writing. Costs $600–$1,000. This gives you a professional, defensible number, useful for negotiations and also required by some banks for certain loan types. If you have any doubt about value, it's money well spent.

5. Ask your mortgage adviser
A good adviser looks at property values daily. They can give you a quick sanity check on whether a price seems reasonable for the area.

The key difference is this: auctions are unconditional. If your bid wins, you're legally committed to buy, there's no finance condition, no building inspection clause, no cooling-off period.

Buying by negotiation (deadline sale, fixed price, or price by negotiation):

• You submit an offer with conditions, finance approval, building inspection, solicitor review
• You have a conditional period (typically 5–15 working days) to satisfy those conditions
• If a condition can't be satisfied, you can withdraw without penalty
• More buyer protection, the standard route for most first home buyers

Buying at auction:

• All due diligence must be completed before the auction
• No conditions on your bid, you buy as is, where is
• Competitive bidding can push prices above expectation
• If you're the winning bidder, you typically sign and pay a 10% deposit on the day

You can go direct to a bank, but you'd be limiting yourself from the start. Here's why a mortgage adviser is usually the smarter move for first home buyers:

Access to multiple lenders: A bank can only offer you their own products. A mortgage adviser compares rates and products across many lenders simultaneously, often finding a better rate and structure than any single bank would offer you directly.

Better rates: Mortgage advisers often access rates that aren't available to the general public, wholesale or broker-channel rates that can be 0.1–0.3% lower than the advertised bank rate. On a $600,000 mortgage, 0.2% is $1,200/year.

Expertise in complex situations: Self-employed, irregular income, multiple income streams, low deposit, complex family structures, banks deal with vanilla applications most efficiently. Advisers know which lenders are most accommodating for each type of borrower.

No cost to you: Mortgage advisers are paid a commission by the lender when your loan settles. You pay nothing for the advice itself.

End-to-end support: A good adviser guides you from pre-approval through to settlement, handling paperwork, chasing lenders, and troubleshooting anything that comes up. This saves a significant amount of your time and stress.

Your property lawyer (also called a conveyancer) handles all the legal and financial mechanics of the transaction, and they're essential. You cannot settle a property purchase in NZ without one.

What your lawyer does:

• Reviews the Sale and Purchase Agreement before you sign, identifying any unusual clauses or risks
• Checks the property title and advises on type (freehold, leasehold, cross-lease) and any encumbrances
• Conducts property searches, title, LINZ records, rates arrears
• Lodges your KiwiSaver withdrawal request on your behalf
• Coordinates with your bank and the vendor's lawyer around settlement
• Holds your deposit in their trust account
• On settlement day: receives your mortgage funds, pays the vendor, and registers your name on the title with LINZ
• Arranges the discharge of any existing mortgages on the property
• Provides you with a settlement statement showing all the financial transactions

Typical cost: $1,500–$2,500 for a standard residential purchase. More complex situations (leasehold, cross-lease, legal disputes, unusual title issues) will cost more. Legal fees are a fixed cost of buying, shop around, but don't try to skip corners here.

Yes, always. No matter how well-presented a property looks, a building inspection by a registered professional is non-negotiable. Visual appeal has nothing to do with structural integrity or hidden water damage.

The cost is $500–$900 for a standard residential property. The potential cost of not having one is $50,000–$500,000+ in remediation for issues like leaky building syndrome, foundation problems, or extensive hidden rot.

The one situation where you might skip a separate inspection is if the vendor has had a very recent building inspection done by a reputable firm and provides the full report. Even then, we'd recommend getting one done yourself, an inspection commissioned by the vendor has a different incentive structure than one you commission yourself.

Conditions protect you during the period between signing and going unconditional. Standard conditions for a first home buyer include:

• Finance condition: The offer is conditional on you securing mortgage finance on acceptable terms. If your bank declines, you can withdraw without penalty. This is the most important condition.
• Solicitor's approval: Your lawyer has a defined period to review and approve the agreement. Gives your lawyer the ability to flag issues without you losing the property.
• Building inspection: A registered building inspector must inspect the property and the findings must be acceptable to you. "Acceptable" is subjective, you define this threshold, not the seller.
• LIM report: The Land Information Memorandum must be obtained and be satisfactory to you.

Conditional period: Typically 5–15 working days depending on negotiation with the vendor. Complex situations may warrant a longer period. Don't agree to a conditional period that's too short to realistically complete all your due diligence.

Pre-approval is not enough for an auction. You need formal, unconditional finance approval from your bank, not just a pre-approval letter.

Here's what you need to have in place before auction day:

• Unconditional finance approval from your bank, specifically for this property at this price
• Completed building inspection, with results you're satisfied with
• LIM report reviewed and satisfactory
• Lawyer has reviewed the Sale and Purchase Agreement
• Deposit available, typically 10% of the purchase price, payable on the day if you're the winning bidder
• Your pre-settlement KiwiSaver withdrawal process understood (you'll need to start this immediately after the auction)

If you bid and win without finance confirmed, you're contractually obligated to complete the purchase. Failure to do so means loss of your deposit and potential legal action from the vendor.

A rejected offer is not the end of the road, it's usually the start of a negotiation.

When you make an offer, the vendor can:

• Accept: You have a deal. Both parties sign and you enter the conditional period.
• Counter-offer: They propose different terms, usually a higher price, different settlement date, or modified conditions. You can accept, counter again, or walk away.
• Reject outright: No counter-offer, no deal. Uncommon unless your offer was well below what they expected. Move on and keep looking.

Multiple rounds of negotiation are entirely normal. Real estate agents expect it. Don't take a rejection personally, it's a commercial transaction and both parties are just finding the middle ground.

It depends on where you are in the process:

• Before acceptance: Yes, you can withdraw at any time before the vendor signs. Your offer is not binding until both parties have signed.
• During the conditional period: Yes, but only on the grounds of your specific conditions. If finance is declined or the building inspection reveals issues you find unacceptable, you can withdraw and receive your deposit back. You cannot withdraw simply because you changed your mind during this period.
• After going unconditional: No. Once you waive or satisfy all conditions, the contract is legally binding. Withdrawing after this point will result in loss of your deposit and potential further legal liability to the vendor.

Your bank will require you to have home (buildings) insurance in place before they will release your mortgage funds. This is not optional, settlement cannot proceed without it. Arrange this during your conditional period, not on settlement day.

Home (buildings) insurance: Covers the physical structure of your home, the building itself, fixed fixtures, fencing. Required by your lender. Typical cost: $1,200–$2,500/year depending on property value, location, and construction type.

Contents insurance: Covers your personal belongings inside the home. Highly recommended, though not lender-mandated. Typical cost: $400–$900/year.

Things that affect your premium:

• Property location, flood zone, fire risk, earthquake zone
• Construction type, brick, weatherboard, mixed
• Age of the property
• Sum insured, ensure you insure the rebuild cost, not the sale price
• Excess level you choose

Life and income protection insurance: Once you have a mortgage, the consequences of not being able to work, through illness, injury, or death, become significantly more serious. We strongly recommend reviewing your insurance position as part of the home buying process. This is a conversation worth having.

Apply immediately after your offer is accepted, as soon as you have a signed Sale and Purchase Agreement. The process takes approximately 10 business days, and your funds must be in your lawyer's trust account before settlement day.

Your conveyancing lawyer lodges the application on your behalf, you don't go directly to your KiwiSaver provider. The funds are paid directly to your lawyer's trust account; they don't pass through your personal bank account.

Banks sometimes require a registered valuation, particularly for low-deposit loans, unusual properties, or when the bank is uncertain about the sale price relative to market value. A registered valuer assesses the property's current market value independently.

Types of bank valuations:

• Automated/desktop valuation: The bank uses market data and comparable sales to estimate value without a physical inspection. Common for standard properties with 20%+ deposit and clear comparable sales.
• Drive-by valuation: An external inspection and photos. Common for low-deposit or borderline applications.
• Full registered valuation: Interior and exterior inspection by a registered valuer. Required for some loan types, unusual properties, or high-value purchases. Cost: $600–$1,200.

What happens if the valuation comes in below the purchase price? The bank will only lend based on the lower valuation figure. If you've agreed to pay $750,000 and the bank values the property at $700,000, the bank will lend on $700,000. The $50,000 gap is yours to find from your own funds. This is why understanding property value before you sign is important.

Yes, you have the right to conduct a pre-settlement inspection under the Sale and Purchase Agreement. This typically happens in the few days before settlement and is your opportunity to confirm the property is in the same condition as when you agreed to buy it.

What to check during your pre-settlement inspection:

• All items listed as included in the sale are still present (appliances, curtains, fixtures)
• No damage has occurred since you viewed the property
• The property is clean and vacant (if it was to be)
• All chattels are working (turn on appliances, test taps, flush toilets)
• No new issues have appeared (staining on ceilings, damage to floors, etc.)

If you find anything wrong, contact your lawyer immediately. Settlement can be delayed or conditions negotiated if the property is not in the agreed condition. Discovering problems after settlement is significantly harder to resolve.

Interest rates change regularly, sometimes weekly. The rates below are indicative as at 19 August 2026 and are for reference only. Speak with your adviser for live rates from multiple lenders before making any decisions.

The Official Cash Rate (OCR) fell from 5.50% in 2023 to 2.25% in November 2025, driving fixed mortgage rates down substantially from their 2023 peaks. Some economists are forecasting rates may begin rising again by 2027 as global inflation pressures return, though this is far from certain.

This is one of the most common questions we get, and there's no single right answer. Here's how to think about it:

Fixed rate:

• Your rate is locked in for the fixed term (6 months to 5 years)
• Repayments are predictable, easy to budget around
• You're protected if rates rise during the fixed period
• If rates fall, you miss out on the benefit until your term expires
• Breaking a fixed term early usually incurs a break fee

Floating (variable) rate:

• Your rate moves with the market, goes up and down over time
• Currently higher than fixed rates for most lenders
• No break fees, full flexibility to make lump sum repayments or refinance at any time
• Useful for money you expect to pay off soon (e.g. an inheritance coming in, or a business sale)

For most first home buyers, fixing a portion of the mortgage gives budget certainty, particularly in the first few years of ownership when cash flow is often tighter. The question is which term to fix at.

This depends on your view of where rates are heading, your personal circumstances, and how much certainty you need. There's no universally correct answer, if there were, everyone would do the same thing.

Shorter terms (6 months to 1 year):

• Currently the lowest rates available (4.49–4.65%)
• Rate rolls over frequently, more exposure to rate movements
• Good if you think rates will fall further or stay low
• Useful if your circumstances might change (e.g. income increase, property sale) and you want more flexibility sooner

Medium terms (2–3 years):

• Slightly higher rates (5.19–5.29%) but more certainty
• Good balance of predictability and not locking in for too long
• Popular choice for first home buyers who want 2–3 years of stable repayments while they settle in

Longer terms (4–5 years):

• Higher rates but maximum certainty
• Worth considering if you're concerned about rates rising significantly in the next few years
• Not ideal if you might want to sell, refinance, or make large lump sum repayments, break fees can be substantial

When your fixed term ends, your mortgage automatically rolls onto your lender's current floating rate, which is usually higher than the fixed rates available. This is called a "rollover" and it's an important date to track.

What to do when your rate is about to expire:

1. Set a calendar reminder 2–3 months before expiry
2. Contact your mortgage adviser (or us) to review the current rate environment
3. Compare what your current lender is offering versus the rest of the market, rate expiry is also an opportunity to refinance if another lender offers significantly better terms
4. Choose your new fixed term based on your current circumstances and rate expectations
5. Lock in your new rate, this can usually be done in advance (typically up to 60 days before expiry)

Rollover dates are also a good time to review whether your loan structure (split/fixed/floating) still fits your situation, whether you've built enough equity to access better rates, and whether there's any value in making a lump sum payment before refixing.

Settlement day is when legal ownership of the property transfers from the vendor to you. The good news: you don't have to do much. Your lawyer handles the financial mechanics; you just need to be available by phone and ready to collect the keys.

The sequence of events:

1. Your bank transfers mortgage funds to your lawyer's trust account (usually by 10am)
2. Your lawyer pools your deposit funds with the mortgage and any KiwiSaver withdrawal
3. Your lawyer pays the full purchase price to the vendor's lawyer
4. The vendor's lawyer confirms receipt and instructs the vendor to hand over the keys
5. Your lawyer lodges the transfer with Land Information New Zealand (LINZ), your name is registered on the property title
6. Your lawyer sends you a settlement statement confirming all financial transactions
7. You collect the keys from the agent, usually by mid-afternoon

Your role on settlement day:

• Be available on your phone in case anything needs your input
• Don't make any large financial transactions on settlement day
• Have home insurance active from today
• Collect the keys when your lawyer or agent confirms settlement is complete

Your mortgage repayment is only part of the picture. Here are the real ongoing costs of homeownership that first home buyers often underestimate:

As a rough guide, homeowners typically spend an additional $15,000–$25,000/year on top of their mortgage repayment in ownership costs. This is the figure to run against your income when checking whether homeownership is genuinely affordable for you, not just the mortgage payment alone.

Moving costs are often an afterthought, but for a typical first home they add up quickly:

• Professional movers: $800–$2,000 depending on how much you have and how far you're going
• Packing materials: $100–$300 if buying boxes; significantly less if using free sources
• Immediate home essentials: Locks changed, a few tools, basic cleaning supplies, $200–$500
• Connection fees: Power, broadband, etc., often nominal but factor in any setup charges
• Initial repair or freshening up: Paint, minor fixes to make the place feel like yours, highly variable

Budget $2,000–$4,000 for the moving process itself, and separately plan for any immediate improvements to the property.

The title type of a property determines what you own, who you have obligations to, and what you can do with the property. Understanding the difference matters, especially for finance.

Freehold (fee simple):

• You own both the land and the building outright and permanently
• No ongoing obligations to any other land owner
• Full control over what you do with the property (subject to planning rules)
• The preferred option, easiest to finance, most future flexibility, highest resale value

Leasehold:

• You own the building but lease the land from a landowner (often a company, trust, or Maori authority)
• The lease is for a set term, often 21 or 33 years, sometimes longer
• Ground rent is payable to the landowner and is typically reviewed periodically
• Some banks will not lend on leasehold properties, or will only lend at lower LVRs
• Value is affected by remaining lease term, shorter leases can be very hard to sell and finance
• Approach with caution. Get legal advice on the lease terms before making any offer.

Cross-lease:

• You and your neighbour(s) jointly own the land freehold, and each lease your portion from the shared ownership
• Common in older suburbs where properties were subdivided
• Any external change to your property (deck, extension, garage) may require your neighbour's agreement
• The existing buildings on the title must match the "flats plan" on the title, if a previous owner extended without updating the plan, there's a defect that needs addressing
• Cross-lease is workable but adds complexity. Have your lawyer review the title carefully.

Yes, and there are some real advantages to buying new, particularly for first home buyers dealing with deposit constraints:

LVR advantage: New builds are exempt from the standard LVR speed limit rules. This means you can buy with as little as 10% deposit without the same restrictions that apply to existing properties, and without the Low Equity Premium that typically applies to sub-20% deposits.

Other potential benefits:

• New build warranty, typically a 10-year weathertightness and structural warranty from the builder
• Compliance with current building codes
• Potentially more energy efficient than older properties
• No immediate maintenance costs, everything is new

Considerations and risks:

• Off-the-plan risk: If you're buying a property that hasn't been built yet, your circumstances, and the market, can change significantly before settlement. Have your lawyer review the contract carefully, particularly around sunset clauses (which allow the developer to cancel if certain conditions aren't met).
• Development delays: Construction timelines slip. Build in flexibility in your plans for delayed settlement.
• Price premium: New builds often carry a new-build premium in their pricing.
• Location trade-offs: Many new build developments are on the outskirts of cities, consider commute costs and lifestyle.

Yes, and it's a great way to reduce the financial pressure of a mortgage. Here's what you need to know:

Taking a boarder: If a boarder uses your home's facilities (living spaces, kitchen) and pays you up to $325 per week, that income is generally tax-free under the IRD's standard cost method. You don't need to file a separate tax return for this income if it stays under the threshold.

Renting a self-contained area: If you're renting a separate dwelling or self-contained space on the property, this is treated as rental income and is taxable. You can claim expenses including a portion of your mortgage interest, rates, insurance, and maintenance proportional to the space rented.

Impact on borrowing: When applying for your mortgage, some lenders will count expected boarder income (typically at 70–80% of the rental amount) as income in your serviceability assessment. This can meaningfully improve your borrowing power, worth discussing with your adviser if you plan to take a boarder.

Self-employed buyers can absolutely get a mortgage, but the process looks different, and preparation matters more. Banks want to see a track record of reliable income, not just what you've earned in one good year.

What most banks require from self-employed applicants:

• Two years of financial accounts prepared by an accountant
• Two years of personal and business tax returns (IR3 and IR10, or equivalent)
• An accountant's letter confirming the business is viable and income is expected to continue
• Bank statements showing business and personal cash flow

How income is assessed: Banks typically use a two-year average of your net income after business expenses, not your revenue. If you've had one exceptional year and one average year, the average is what the bank will use. Some lenders take the lower of the two years to be conservative.

The tax-efficiency trap: Many business owners legitimately minimise their taxable income through allowable deductions. This is smart tax planning, but it reduces the income figure the bank can count when assessing your mortgage. The year or two before you plan to apply, consider whether the tax savings are worth the reduction in borrowing power.

Job loss or income reduction is a real risk, and knowing what your options are before it happens makes a big difference. The most important thing: contact your lender immediately. Don't miss payments and hope for the best, banks have structured hardship processes and they'd far rather work with you than deal with a default.

What your lender can offer:

• Mortgage holiday: Pause repayments for a defined period (typically 3–6 months). Interest continues to accrue but is added to your loan balance rather than requiring payment.
• Interest-only repayments: Temporarily reduce to paying interest only, lower monthly payments, with no principal reduction during this period.
• Extended loan term: Spreading your remaining balance over a longer period reduces monthly repayments.
• Reduced repayments: Some lenders can structure a temporary reduction below the standard repayment amount.

The best protection: Income protection insurance. This replaces a portion of your income (typically 75%) if you're unable to work due to illness or injury. Life insurance ensures your mortgage can be paid off if you die. These aren't exciting, but they're arguably the most important financial decisions you make when you take on a mortgage.

Your credit history influences which lenders will consider your application and what rates they'll offer. In NZ, credit reporting is handled by Centrix, Equifax, and Illion. You can request a free credit report from any of these before you apply.

What damages your credit score:

• Missed or late payments on any credit account
• Defaults (unpaid debts sent to collections)
• Bankruptcy or insolvency history
• Multiple credit applications in a short period (each application creates a "hard enquiry")
• Accounts sent to debt collection agencies

How to improve your credit score before applying:

• Pay every bill on time, power, internet, phone, all credit accounts
• Resolve any outstanding defaults (call the lender and negotiate a payment)
• Close unused credit cards and reduce limits on cards you keep
• Stop applying for new credit in the 3–6 months before your mortgage application
• Close buy-now-pay-later accounts
• Check your credit report for errors, mistakes happen, and you have the right to dispute them

How long does improvement take? Positive payment history starts showing within a few months. Defaults remain on your file for 5 years, though their impact diminishes over time, particularly if you demonstrate consistently good behaviour afterward. If you have a significant credit issue, be upfront with your adviser: they can match you with lenders who specialise in non-standard applications.

Yes, in many cases you can, because KiwiSaver eligibility is assessed individually, not as a couple.

If you have never owned residential property before, you can still withdraw your KiwiSaver for your share of the deposit, even if your partner has previously owned a home. Your partner would not be able to withdraw their KiwiSaver (unless they qualify under Kāinga Ora's second-chance criteria), but yours is still accessible.

Kāinga Ora First Home Loan: If either applicant currently owns property, neither can access the First Home Loan. If your partner previously owned property but no longer does, this is assessed case by case by Kāinga Ora.

It depends on the nature of the property. KiwiSaver first home withdrawals are intended for residential properties, homes you'll live in as your main residence. The rules around lifestyle blocks are more nuanced:

• A house on a small rural section that is primarily residential in nature is generally acceptable
• Larger blocks with a significant agricultural or commercial use component may not qualify, particularly if they fall outside the definition of "residential property" under the KiwiSaver Act
• Properties with separate commercial income streams (orchards, livestock, commercial activity) are less likely to qualify

The specific acreage threshold and land use assessment varies. Your KiwiSaver provider will make a determination based on the specifics of the property. Before you make an offer on a lifestyle block, we'd recommend checking your KiwiSaver eligibility with your provider or with us, don't assume it'll be approved.

There's no rule preventing you from buying an investment property whenever you're ready, but realistically, it typically takes 3–5 years after buying your first home before the numbers work in your favour.

What you'll generally need:

• Meaningful equity built up in your first home (through mortgage repayments and property value growth)
• A 35% deposit for the investment property, RBNZ LVR rules for investors require at least 35% equity
• Sufficient income to service both mortgages under the bank's stress test
• A clear investment strategy, what type of property, what return you need, how it fits your financial plan

How people typically access their first investment: Equity growth in the first home is often used as the deposit source for an investment property. If your home has grown in value, you may be able to access that equity as a deposit without needing additional savings, but this requires careful structuring to manage your overall debt position and tax implications.

The best time to start thinking about this is 12–18 months before you plan to act, giving you and your adviser time to structure your finances correctly.