Getting your first mortgage in New Zealand: A guide for first-home buyers

Whether it’s a white picket fence or studio apartment in a high-rise, a lot of us hope to own our own home one day. Despite this, more than half of us believe the dream of home ownership is no longer attainable for the average person. But for those of us on that journey, there are a few basics to get your head around when it comes to your first mortgage in New Zealand.

Saving for your first home deposit

Aside from the obvious partner arguments about how many throw pillows are too many throw pillows, the upfront cost of a deposit is likely the biggest challenge for any would-be homeowner.

How much deposit do first home buyers need?

Generally speaking, banks will require you to have 20% of the purchase price of a property in order to get a mortgage. And considering first home buyers are spending an average of $659,481 on their purchase, that’s a little under $132,000.

The good news is that there is an option for Kiwis who look at that 20% and envisage their future ownership goals as far away as the moon – First Home Loans. This program is run by Kianga Ora, and allows first home buyers to access a mortgage with just a 5% deposit. That makes the average a much more achievable $32,974.

Keep in mind, prices vary greatly depending on what you’re buying – and where you’re buying it. Many places (outside of the big cities) have properties available at lower prices than the average.

How to use KiwiSaver to buy your first home

Another potential lifeline for first home buyers could be KiwiSaver. If you have been enrolled in KiwiSaver for at least three years and are now buying your first property, you may be able to use those funds to help with your deposit.

You must leave a minimum of $1,000 in your account, but otherwise you could use those savings to help you get into a home of your own sooner.

Understanding the mortgage application process

Buying a home means going through a lot of steps. And paperwork. So much paperwork.

How to get pre-approved for a mortgage

If you’re serious about house hunting, you might want to consider getting pre-approved for a mortgage. This basically could do a lot of the prep work ahead of time, so you can jump on that dream home as soon as you find it.

It’s called ‘conditional pre-approval’, it doesn’t cost you anything, and it gives you a clear budget to work with. Plus, it usually lasts for three months, so it gives you time to explore the market.

To arrange pre-approval, you’ll need to work with your financial advisor or bank. They’ll let you know what documents and information you’ll need to prove, but typically you’ll need to provide a raft of paperwork, including:

  • Savings
  • Debts
  • Assets
  • Payslips
  • Bank statements
  • Tax returns
  • Identification

They will then run a credit check and chat to you about what you’re looking to buy, before giving you a maximum figure.

Do you need insurance for a mortgage?

Mortgage insurance is not compulsory or a legal requirement in New Zealand for standard loans.

However, if you have less than a 20% deposit, or are using the First Home Loan scheme, you may be required to pay for mortgage insurance to cover the risk the lender is taking by providing a higher investment.

The only compulsory insurance when you own a home is home insurance – and that’s because it’s typically a requirement from lenders. Of course, it’s up to you to speak to a financial advisor and determine if other insurance products are right for you.

Mortgage protection insurance vs life insurance

Mortgage protection insurance can help cover your mortgage repayments if you’re unable to work due to illness, injury, or job loss, but the benefits and conditions depend on the specific policy you choose.

Life insurance is different, as it provides a lump sum payout if you become terminally ill or pass away. This payout can be used however your family needs – whether that’s covering mortgage repayments, paying off credit card debt, or meeting funeral costs.

Find out how OneChoice Life Insurance can give you and your family peace of mind, or request a quote today.

19 Dec 2025