Kainga Ora First Home Loan: 2025 Guide & Requirements
If you’re a first-home buyer in New Zealand, the deposit has always been the steepest part of the property ladder — and in 2025 the rungs have moved: the First Home Grant stopped accepting applications on 22 May 2024, yet the Kāinga Ora First Home Loan remains open to buyers with a 5% deposit (the Ministry of Housing and Urban Development). Here’s what the scheme really requires, what it costs beyond the deposit, and how to apply without getting stuck in lender limbo.
Minimum Deposit: 5% ·
Max LVR: 95% ·
Income Cap (Single): $95,000 ·
Grant Status: Removed (22 May 2024)
Quick Snapshot
- Minimum 5% deposit required (Kāinga Ora (the government housing agency))
- First Home Grant removed on 22 May 2024 (the Ministry of Housing and Urban Development (released official correspondence))
- Loan underwritten by Kāinga Ora and issued by approved lenders (Kāinga Ora (official site))
- No official signal on reinstating a grant under a future government
- Interest-rate margins vary by lender and aren’t centrally published
- : Cabinet agrees to scrap the grant (the Ministry of Housing and Urban Development (released official correspondence))
- : Grant stops accepting applications (NZ Government Beehive (official government release))
- 2025: Loan remains active at a 5% deposit (the Ministry of Housing and Urban Development) (the Ministry of Housing and Urban Development (released official correspondence))
- Apply through an approved lender, not Kāinga Ora directly (The Co-operative Bank (one of the scheme’s approved lenders))
- Budget for a 1.2% Lender’s Mortgage Insurance premium (Kāinga Ora (the government housing agency)) (The Co-operative Bank (one of the scheme’s approved lenders))
The pattern: four cards separate what’s locked in from what’s still open — and the open questions are mostly about lender discretion and future policy.
Key Facts at a Glance
The scheme’s core numbers sit in a tight frame — generous on entry, strict on limits.
| Field | Value |
|---|---|
| Full Scheme Name | Kāinga Ora First Home Loan |
| Deposit Requirement | 5% of property price |
| Grant Status | Removed (22 May 2024) |
| Max LVR | 95% |
| Administering Body | Kāinga Ora |
| Minimum Age | 18 |
| Income Cap (Single, No Dependants) | $95,000 before tax |
| Income Cap (Single, With Dependants) | $150,000 before tax |
| Income Cap (Two or More Buyers) | $150,000 combined before tax |
| Lender’s Mortgage Insurance | 1.2% premium |
| Property Size Limit | Generally under 1 hectare |
| Occupancy Rule | Must be your primary residence |
The read: these numbers haven’t moved since the grant’s removal — the 5% entry is the product’s whole identity.
What Is the Kāinga Ora First Home Loan?
The Kāinga Ora First Home Loan is a government-backed mortgage for first-home buyers, offered through selected banks and other lenders and underwritten by Kāinga Ora, the government housing agency (Kāinga Ora (the government housing agency)). Kāinga Ora sets the rules; the lender you choose sets the rate and the monthly repayments.
The scheme is strictly for owner-occupiers. You must buy the home to live in it, and you can’t use it for a rental or investment property (The Co-operative Bank (one of the scheme’s approved lenders)).
How Is It Different from the First Home Grant?
- The First Home Grant was a cash payment toward a deposit; it stopped accepting applications on 22 May 2024.
- The Kāinga Ora First Home Loan is a lending product, still active in 2025, that needs a 5% deposit.
- One difference matters most: the grant gave money, the loan gives credit — and you repay a loan with interest.
For years the two schemes were announced in the same breath, which is why many buyers still ask whether the grant is available. It isn’t.
The implication: the grant’s removal didn’t kill government support — it redirected it into a loan that costs borrowers more over time and keeps the government’s exposure in the form of a guarantee rather than a handout.
Who Is Eligible for the Kāinga Ora Home Loan?
Kāinga Ora’s rules set the baseline, and your lender checks it against your actual file. You need to be at least 18, a New Zealand citizen, permanent resident or qualifying resident-visa holder, and ordinarily resident in New Zealand. You also need to meet the “first-home buyer” test: no current ownership of another property or land (Māori land is excluded), and the property must be your main home. Previous homeowners in a similar financial position to a first-home buyer can still qualify (Kāinga Ora (the government housing agency)).
What Are the Income and Property Price Caps?
- Single buyer without dependants: $95,000 before tax in the previous 12 months
- Single buyer with one or more dependants: $150,000 before tax
- Two or more buyers combined: $150,000 before tax, regardless of dependants
- Property price caps: set regionally, so the ceiling varies by area
The 5% deposit can be built from savings, KiwiSaver first-home withdrawals, eligible gifts and other sources — so the real test isn’t a fat bank balance; it’s an income that stays under the cap while still covering the mortgage.
The caps create an awkward squeeze: your income must fit under the limit, yet stay high enough for the lender to approve the mortgage. That double test is the real gate.
What this means: eligibility is a two-sided income test — low enough for the scheme, high enough for the bank — which is why pre-approval matters more than the brochure rules.
The pattern: the caps cut both ways — too much income and you’re out, too little and the bank won’t lend.
How Much Deposit Do I Need for a $300,000 House?
On a $300,000 purchase, the 5% minimum deposit is $15,000. That’s the headline number, but the cash you bring also has to absorb Lender’s Mortgage Insurance: Kāinga Ora charges a 1.2% premium on the loan, which comes to $3,600 on that same purchase (Kāinga Ora (the government housing agency)).
The 5% itself can be assembled from savings, KiwiSaver first-home withdrawals, eligible gifts — even other grants, where available. The scheme doesn’t demand every dollar come from a savings account.
A 5% deposit sounds like a free pass, but on a $300,000 loan the 1.2% Lender’s Mortgage Insurance premium adds $3,600 — and you’ll pay interest on the full borrowed amount for decades.
Can I Get a No Deposit Mortgage as a First-Time Buyer?
- True 100% loans are rare in New Zealand’s current lending market.
- The Kāinga Ora scheme’s 5% entry is the closest government-backed option.
- Borrowing the full price leaves no buffer if the market dips.
In practice, lenders want to see that you have skin in the game. A 5% deposit is already a thin buffer; a zero-deposit loan puts the lender — and you — underwater from day one if prices fall.
The trade-off: a bigger deposit buys you lower LMI costs and more lender options. Five percent is the floor, not the sweet spot.
What Do Mortgage Lenders Look At?
Scheme rules decide who can apply; lender policy decides who actually gets the money. Alongside the Kāinga Ora caps, lenders weigh the same factors they use for any mortgage: a clean credit history, stable employment, verified income, and a debt-to-income ratio that leaves room for the new repayment.
Lenders stress-test repayments at rates above today’s advertised ones, so a borrower who fits the Kāinga Ora income cap can still be declined if other debts eat the serviceability buffer.
What Is the Minimum Income for a $500,000 Mortgage?
- Credit history: a core filter for every approval
- Employment stability: lenders prefer a stable, verifiable income history
- Debt-to-income ratio: sets how large the repayment can be relative to your pay
There’s no single “minimum income” for a $500,000 mortgage — the figure depends on the interest rate, the loan term and your other debts. The practical test is whether the repayment fits your budget at a higher stress-test rate, which is why lenders work backwards from what you can service, not what the scheme advertises.
Why this matters: meeting the Kāinga Ora caps gets you in the door, but the lender’s serviceability test decides whether you walk out with a loan.
How Do I Apply for the Kāinga Ora First Home Loan?
You don’t apply to Kāinga Ora directly. The loan is issued through approved lenders — banks and other financial institutions — and Kāinga Ora underwrites it in the background. Your first move is to find an approved lender and ask about the Kāinga Ora First Home Loan product.
Before you start, pull together proof of identity, income records for the past year, and a clear picture of your savings and KiwiSaver balance. The lender verifies the Kāinga Ora caps as part of its normal lending process.
What Other First Home Buyer Options Are Available?
- Standard bank mortgage: more deposit usually required to avoid Lender’s Mortgage Insurance
- KiwiSaver first-home withdrawal: a deposit boost available alongside any mortgage
- The First Home Grant: the former cash boost, no longer available after 22 May 2024
The comparison table below lines up the loan against a standard mortgage and the now-removed grant.
The takeaway: for a buyer with a small deposit, the Kāinga Ora loan is the only one of the three that still exists in 2025, which is why it carries so much weight.
How the Kāinga Ora Loan Compares With Other First-Home Routes
Three routes, one pattern: the government-backed loan is the only one still accepting a 5% deposit in 2025 — the grant is gone, and a standard mortgage usually wants more equity.
| Feature | Kāinga Ora First Home Loan | Standard Bank Mortgage | First Home Grant (ended 22 May 2024) |
|---|---|---|---|
| Minimum deposit | 5% | Often 20% to avoid LMI | n/a — it was a cash boost, not a loan |
| Government backing | Yes — underwritten by Kāinga Ora | No | Yes — paid by Kāinga Ora |
| KiwiSaver can help | Yes — first-home withdrawal counts toward the 5% | Generally yes, for the deposit | Was a separate top-up |
| Status in 2025 | Active | Active | Removed |
| Owner-occupier rule | Yes — no investment purchases | No — investors welcome | Yes |
The trade-off: the Kāinga Ora loan trades flexibility for access — you get in with less cash, but you give up the option to rent out the property or borrow as an investor.
Kāinga Ora First Home Loan: Specifications at a Glance
A dozen specifications, one pattern: every rule narrows the scheme toward a single outcome — an owner-occupier with a small deposit, in a modest home.
| Specification | Detail |
|---|---|
| Scheme name | Kāinga Ora First Home Loan |
| Minimum deposit | 5% of the purchase price |
| Maximum LVR | 95% |
| Lender’s Mortgage Insurance | 1.2% premium |
| Minimum age | 18 years |
| Residency | NZ citizen, permanent resident or qualifying resident-visa holder |
| Income cap — single, no dependants | $95,000 before tax |
| Income cap — single with dependants | $150,000 before tax |
| Income cap — two or more buyers | $150,000 combined before tax |
| Property price caps | Vary by region |
| Property size | Generally under 1 hectare |
| Occupancy | Must be the buyer’s primary residence |
The pattern: low entry, tight borders — the scheme is designed for a specific buyer at a specific moment, not as a general-purpose mortgage.
Pros and Cons of the Kāinga Ora First Home Loan
The scheme works brilliantly for some buyers and poorly for others. Here’s the honest balance.
Upsides
- Entry from a 5% deposit — the lowest practical bar available to owner-occupiers
- Deposit can mix savings, KiwiSaver withdrawals and eligible gifts
- Underwritten by a government agency, with the scheme still active in 2025
Downsides
- 1.2% Lender’s Mortgage Insurance premium adds $3,600 to a $300,000 loan
- Income caps and regional price caps exclude higher earners and expensive suburbs
- Owner-occupier rule blocks investment purchases
- The grant component is gone — there’s no cash top-up anymore
The catch: the loan suits first-home buyers who fit the caps, and it punishes those who don’t.
Your Application Checklist: 7 Steps to a 5% Deposit Loan
The application runs through a lender, but the preparation is yours. Work this checklist in order and you’ll avoid the two most common stalls: missing documents and choosing a property over the regional cap.
- Confirm your status: age, residency, and the first-home buyer test.
- Check the income cap for your household size — single, with dependants, or joint.
- Look up the property price cap for your region before you shortlist houses.
- Assemble your 5% deposit from savings, KiwiSaver first-home withdrawal, and eligible gifts.
- Approach an approved lender and ask specifically for the Kāinga Ora First Home Loan.
- Get pre-approval with ID, income records, and savings history ready.
- Make an offer, settle the loan, and move in — the property must remain your primary residence.
The implication: most failures happen at step 2 or 3 — buyers fall in love with a house before they’ve checked the caps.
The practical test: pre-approval is the only way to know whether the caps and the lender’s serviceability test line up.
The First Home Grant: A Short Timeline
- — Cabinet agrees to discontinue the First Home Grant as part of Budget 2024 (the Ministry of Housing and Urban Development (released official correspondence))
- — the Government announces the First Home Grant closure, and the scheme stops accepting new applications (NZ Government Beehive (official government release))
- — the closure is tied to reprioritising savings into 1,500 new social houses (NZ Government Beehive (official government release))
- — the Kāinga Ora First Home Loan remains active with a 5% minimum deposit (the Ministry of Housing and Urban Development)
The pattern: the cash grant died in a single budget, but the lending product survived — and it’s the survivor that matters for buyers in 2025.
What’s Confirmed and What’s Still Unclear
Confirmed facts
- Kāinga Ora is the government agency administering the First Home Loan (Kāinga Ora (official site))
- The First Home Grant was removed on 22 May 2024 (the Ministry of Housing and Urban Development (released official correspondence))
- The minimum deposit is 5% of the purchase price (the Ministry of Housing and Urban Development)
- A 1.2% Lender’s Mortgage Insurance premium applies (Kāinga Ora (the government housing agency))
- Income caps are $95,000 for a single buyer without dependants and $150,000 with dependants or for joint buyers (Kāinga Ora (the government housing agency))
- The property must be your primary residence — no investment purchases (The Co-operative Bank (one of the scheme’s approved lenders))
What’s unclear
- Whether a future government will reinstate a grant in a different form
- What interest-rate margins each approved lender applies to the loan
- How consistently lenders apply the eligibility criteria in practice
- Whether regional price caps will be updated as house prices shift
- How long approval actually takes at each lender — no public service standard exists
- Whether the government will expand the scheme’s caps in response to market pressure
The pattern: the scheme’s mechanics are public, but its real behaviour — lender discretion, honest timeframes, future policy — stays opaque.
What the Official Sources Say
The First Home Loan is issued by selected banks and other lenders and underwritten by Kāinga Ora.
The First Home Loan remained available after the First Home Grant was discontinued.
the Ministry of Housing and Urban Development (released official correspondence)
Two things follow from those official statements: the product is real and current, and the only part that died in 2024 was the cash grant.
The removal of the grant in May 2024 didn’t end government help for first-home buyers — it narrowed it. The Kāinga Ora First Home Loan still offers the most accessible entry point in New Zealand, but it comes with hard income caps, regional price ceilings, an owner-occupier rule, and a 1.2% Lender’s Mortgage Insurance bill. For first-home buyers in New Zealand, the decision is now practical rather than political: work through an approved lender, treat the 5% deposit as the floor, and budget for the extra costs — or keep renting while waiting for a grant that no longer exists.
Frequently Asked Questions
Can I use my KiwiSaver for the Kāinga Ora First Home Loan deposit?
Yes. Kāinga Ora’s rules allow the 5% deposit to include savings, first-home withdrawals, eligible gifts and other grants — so a KiwiSaver first-home withdrawal is one of the most common building blocks.
Does the Kāinga Ora First Home Loan have a fixed or floating interest rate?
The loan is issued by approved banks and lenders and underwritten by Kāinga Ora, so the rate is set by the lender you choose rather than by the government. There’s no single official rate, which is why comparing offers matters.
How long does the Kāinga Ora loan application process take?
Kāinga Ora doesn’t publish a standard turnaround. In practice, the timeline follows your chosen lender’s normal approval process — which is why pre-approval before house-hunting saves months.
Can I buy an existing property with the Kāinga Ora scheme?
Yes, as long as it becomes your primary residence. The scheme covers existing and new homes you’ll live in, and it can’t be used for a rental or investment property (The Co-operative Bank (one of the scheme’s approved lenders)).
What fees are involved in the Kāinga Ora First Home Loan?
The main scheme-specific cost is a 1.2% Lender’s Mortgage Insurance premium — $3,600 on a $300,000 loan. Other lender fees, valuation costs and legal fees vary by bank.
Can I apply with a partner or friend?
Yes. Two or more buyers can apply together, and the combined income cap is $150,000 before tax regardless of how many dependants you have.
The pattern: the answers circle back to the same two realities — Kāinga Ora sets the frame, and the lender decides the rate, the timeline and the final approval.
Related Reading
- Mortgage Rate Cuts New Zealand 2026: Forecasts & Best Deals
- Government Contribution to KiwiSaver: $260.72 Max & 2026 Changes
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