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Where Am I Going To Find My Mortgage Deposit?

One of the simplest ways to grow your deposit is KiwiSaver. Below, we take a quick look at how quickly your deposit could grow and the numbers around this.


Robyn Turner is a Mortgage and KiwiSaver Adviser based in Tauranga.


The Numbers On A KiwiSaver Deposit

Let’s say you are earning $50,000 per year on wages / salary. You contribute 3% of your income*, which is $1,500 per year. Your employer also contributes 3% and the government contributes $521 per year.

After 3 years and assuming no growth or loss in KiwiSaver, you will have contributed a total of $4,500 and your KiwiSaver balance will be $10,563 thanks to your employers contributions and government contributions. You could also qualify for the HomeStart grant of $3,000 – $6,000 which is available after 3 threes of contributions. There is $13,563 available for the purchase of a first home assuming no growth in your KiwiSaver at all! After 5 years you will have contributed $7,500, your employer will have contributed $7,500 and the government will have contributed $2,605, bringing your deposit to $17,605. But you could also qualify for a $5,000-$10,000 HomeStart Grant.

Now imagine you have a partner doing the same thing. Between the two of you, there will now be a deposit of $35,210 plus a possible HomeStart grant of $20,000 if you are buying a new build under $550K in the Tauranga region.

In just five years you could have reached the minimum deposit level of a new build in Tauranga with no extra savings made. If you’ve been careful and saved extra, you could be there much sooner.

Our online course “How To Buy Your First Home” walks you through each step to present yourself to the bank as the perfect first-home buyer.

What if my partner isn’t working?

Now let’s say you or your partner aren’t working. Should a non working person contribute? Let’s see how that works. The government will still offer the HomeStart grant, but only if you contribute the same amount as someone on the minimum wage working a 40 hour week. As of 1 April 2019 this is increasing to $17.70 per hour or $36816 per year. This equates to minimum KiwiSaver contributions of $1104.48 per year (ended 30 June) or an average of $21.24 per week. Watch those minimum wage increases or consider contributing a bit more so you aren’t caught out.

After 5 years you will have have contributed $5522. The government will have contributed $2605 in member tax credits and you could qualify for the full 5 year HomeStart grant of $5000-10000. This could be contributing between $13127 and $18127 to your deposit if you follow this strategy with just an investment of $5522. It is totally worth trying to contribute to KiwiSaver even when not working.

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What if I'm self-employed?

Self employed? Make sure you contribute either 3% of your income, or 3% of the minimum wage to KiwiSaver, whichever is the greater. This will ensure you get your HomeStart grant allowance after 3 years of contibutions.

If you're not in KiwiSaver yet and still thinking about future plans for KiwiSaver please seriously consider starting. It is one of the fastest ways to grow your deposit.

Be aware there are purchase price maximums on the HomeStart grant. Further information is available here: https://www.hnzc.co.nz/ways-we-can-help-you-to-own-a-home/

*Employer contributions may be subject to tax.

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