Examples of people who are eligible for first home support

These different scenarios show how changes to the First Home Products will benefit first home buyers.

Examples, policy changes and outcomes

The examples are reflective of current lending practices, assume an interest rate of 5.0 percent, and a 30-year mortgage term. 

Dual income household buying existing home

Two teachers with five years’ experience have a combined income of $150,000. They are looking to buy an existing two-bedroom home for $740,000 in South Auckland. Both have been contributing to KiwiSaver for five years and have other savings. They have a $75,000 deposit.

  • The increased house price caps for the First Home Grant for existing properties in Auckland allows this couple to access support for a wider range of properties.
  • The removal of the house price caps from the First Home Loan allows this couple to access a mortgage when they otherwise might have struggled because of current Loan to Value Ratios (LVR) restrictions.

The buyers will get two $5,000 First Home Grants totalling $10,000, bringing their total deposit to $85,000. They have around an 11 percent deposit and meet the criteria for the First Home Loan. The buyers will need to contribute 1 percent of the loan to an insurance scheme, increasing their mortgage by $6,550. Their monthly mortgage payment of $3,550 is around 28 percent of their pre-tax income.

Single parent family looking to buy existing home

A school principal with one child earns $120,000. The principal is looking to buy an existing two-bedroom home for $620,000 in Upper Hutt. They have been contributing to KiwiSaver for eight years and have other savings. They have a $75,000 deposit.

  • Introducing an income cap for individual buyers with dependents allows the buyer to access the Grant and Loan.
  • The increased house price caps for the Grant for existing properties in the Wellington urban area allows access to a wider range of properties.
  • The removal of the house price caps from the First Home Loan allows the buyer to access a mortgage when they otherwise would have struggled because of current LVR restrictions.

The buyer will get a First Home Grant of $5,000, bringing their total deposit to $80,000. They have a nearly 13 percent deposit and meet the criteria for the First Home Loan. The buyer will need to contribute 1 percent of the loan to an insurance scheme, increasing their mortgage by $5,400. The buyer’s monthly payment of $2,930 is around 29 percent of their pre-tax income.

Single person buying a two-bedroom unit

A self-employed landscaper earns $95,000. They are looking to buy an existing two-bedroom unit for $500,000 in Palmerston North. They have been making a voluntary contribution of at least $2,000 to KiwiSaver for over 10 years and have other savings. They have a deposit of $65,000.

  • The adjustment to the KiwiSaver contribution requirement allows the buyer to access the First Home Grant. Previously a first home buyer had to contribute 3 percent of their income.
  • The increased house price caps for the First Home Grant for existing properties in Palmerston North allows the buyer to access support for a wider range of properties.
  • The removal of the house price caps from the First Home Loan allows the buyer to access a mortgage when they otherwise would have struggled because of current LVR restrictions.

The buyer will get a First Home Grant of $5,000 bringing their total deposit to $70,000. They have a 14 percent deposit and meet the criteria for the First Home Loan. The buyer will need to contribute 1 percent of the loan to an insurance scheme, increasing their mortgage by $4,300. The buyer’s monthly payment of $2,330 is around 29 percent of their pre-tax income.

Dual income household in rent-to-buy scheme

A qualified builder and an early childhood teacher have a combined income of $125,000. They began renting a brand new three-bedroom property in Dunedin at the start of 2017 through a Kāinga Ora – Homes and Communities approved rent to buy scheme. They are now ready to purchase this property after five years of financial planning and saving through KiwiSaver. The home will cost them $600,000. They have a deposit of $45,000.

  • The adjustment of the definition of new properties for rent to buy schemes will allow this couple to access the grant for new properties ($10,000) instead of the existing property grant ($5,000).
  • The increased house price caps for the Grant in Dunedin for new build properties allows this couple to access support to purchase their property.
  • The removal of the house price caps from the First Home Loan allows them to access a mortgage when they otherwise would have struggled because of current LVR restrictions.

The buyers will get two $10,000 First Home Grants totalling $20,000, bringing their total deposit to $65,000. They have around an 11 percent deposit and meet the criteria for the First Home Loan. The buyers will need to contribute 1 percent of the loan to an insurance scheme, increasing their mortgage by $5,350. Their monthly payment of $2,900 is around 28 percent of their pre-tax income.

Large whānau looking to relocate 

A large whānau from Whangārei runs a small business and earns $100,000. They are looking to relocate a home onto their whenua near Whangārei. The house and relocation will cost $400,000. The whānau has been contributing to KiwiSaver for eight years and has a deposit of $35,000.

  • The increased loan cap for the Kāinga Whenua Loan will allow this whānau to access a larger loan enabling them to relocate a home onto their whenua. Without this higher cap they may not have been able to finance the home.
  • The adjustment to the definition of new properties for relocatable homes will allow this whānau to receive the higher new property grant ($10,000 each) instead of the existing property grant ($5,000).

The whānau qualify for two $10,000 First Home Grants totalling $20,000, bringing their total deposit to $55,000. They have nearly a 14 percent deposit meet the criteria for a Kāinga Whenua Loan. When accessing the Kāinga Whenua Loan there is a 1 percent insurance premium, increasing their mortgage by $3,450. Their monthly payment of $1,870 is around 22 percent of their pre-tax income.

Home ownership products 

Visit the Kāinga Ora website for more information.

Kāinga Ora Home Ownership Products

Kāinga Ora First Home Decision Tool

Published: May 19, 2022

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