fbpx

“My income is too high to be able to use KiwiSaver to purchase my first home”, was a comment made in passing to me today.


Article written and submitted by Robyn Turner. Robyn is a Mortgage and KiwiSaver Adviser based in Tauranga.

Is this true? A lot of people mix up First Home Loan (previously called the Welcome Home Loan), First Home Grant (previously called the HomeStart Grant) and KiwiSaver, not realising that they are in fact three different products. There are similarities, but also differences.

https://www.youtube.com/watch?v=0ahN3Wh4LV4

KiwiSaver

Let’s start with KiwiSaver. You can use it to buy your first owner-occupied home, provided you have been in the scheme for a minimum of three years. We do recommend if you are planning to use your KiwiSaver to purchase your home, that it is a good good idea to contribute to it in order to qualify for the First Home Grant and/or Member Tax credits. We all love free money after all?

Do you have to have contributed for three full years?

No. According to the eligibility criteria on the KiwiSaver webpage, you must have been a member. In the past, you must have contributed for 3 years however this has now changed.

How much can I withdraw from my KiwiSaver for my first home?

You are eligible for all of the funds in your account except for $1,000. If you have brought back some Superannuation from the UK or Australia, this will most likely have to stay in the fund as well. These countries have different rules for withdrawing money so aren’t eligible for withdrawal for your first home.

In essence, all money you have put in while in NZ, your employer has put in, profits you’ve made and Tax Credits from the government are eligible to withdraw except for $1,000.

Are there income caps for a KiwiSaver first home withdrawal?

No, regardless of whether you earn $0 or $2M you can still withdraw your KiwiSaver to purchase your first home.

Can you use KiwiSaver for a second home?

Maybe… Sometimes… There are criteria that apply, so chat to us about your specific circumstances.

My spouse has used KiwiSaver before to buy a home and he has now sold it. Can we use my KiwiSaver as I’ve never purchased before?

You can use your KiwiSaver, but your partner will not be able to use theirs.  If they purchased their home without the use of KiwiSaver, they may qualify to use their funds provided they are “in the same position as someone purchasing their first home”. Talk to us more about this particular quirk if you are in this position.

First Home Grant

First Home Grant has a few more conditions attached and many of those conditions are the same as for the First Home Loan.

To qualify for the First Home Grant you must contribute to KiwiSaver for a minimum of three years and there are minimum amounts you need to contribute. This does not apply to First Home Loan.

Let’s look at some conditions that First Home Loans and the First Home Grant have in common. 

  • Income caps – Limited to $85K per annum for an individual or $130K for a couple. If your pay has recently increased, it is still possible to qualify provided the previous 12 months to date are under these caps.
  • Regional price caps – Maximum spend applies. For the Tauranga region for example, it is $500K for an existing dwelling and $550K for a new build.
  • You cannot own any other property. This applies to KiwiSaver withdrawals also.
  • You must live in the home you are buying. This applies to KiwiSaver withdrawals also.

One of the reasons that the KiwiSaver First Home withdrawal and the First Home Grant are often confused is that you apply for them on the same form (but they have different criteria). Just keep in mind that there are significantly less criteria to get your KiwiSaver out.


Our book “The Successful First Home Buyer” walks you through each step to present yourself to the bank as the perfect first-home buyer. Available in paperback at The Book Depositary or on Amazon Kindle.

First Home Loans

First Home Loans do tend to have additional conditions, which are hard to find documented anywhere. These are a few of the ones we know.

  • Must pay a 1% lenders insurance.
  • Must have been in the same job for a minimum of one year, or the same industry for a minimum of two years.
  • Must not have any realisable assets over $5000 after the purchase of your home.
  • NZ Resident or Permanent Resident
  • Credit history must be squeaky clean without any defaults in the last five years.
  • Overtime is not counted unless an employee has been in their job for a minimum of twelve months.
  • May be tougher on the type of security held. If the property is in need of significant repairs, it is unlikely to be considered an acceptable security for a First Home Loan.

Does being excluded from one product automatically mean you are excluded from the other?

No. You might not have been contributing to KiwiSaver for three years, but you could still qualify for a First Home Loan. You may have not been working in the same job for one year, or the same industry for two years, but you may still qualify for the First Home Grant.


Using my knowledge to help guide you through the process can make a huge difference to what you can achieve and most of my clients are surprised by the unexpected value they gain from talking to me.

Latest Posts

OCR announcement - 13/11/19

No reduction of the OCR Despite the diversity of opinions of whether to cut or not to cut the Official Cash Rate to 0.25%, the Reserve Bank unexpectedly held interest…

Read More

The Official Cash Rate (OCR) explained

What is the OCR? The OCR is an interest rate set by the Reserve Bank of New Zealand which defines the wholesale price of borrowed money. This directly affects the…

Read More

Deposits: How much do you need for your first home?

If you have less than 20% deposit, you are referred to (by the banks) as a Low Equity (or Deposit) Borrower.  You are required to meet a different set of…

Read More

First Home Grants and KiwiSaver

First home buyers can often get tangled up in the pile of new concepts to learn.  In this article, we explore the basics of withdrawing your KiwiSaver and meeting the…

Read More

Read previous post:
How to purchase an apartment
Apartments: The Low-Down On High Rises

Apartments are a very tempting purchase, especially for first-home buyers.  They tend to be lower cost and therefore much more...

Close