If you want to know how you can use KiwiSaver to buy your first home read on and find out what you need and how buying your first home using KiwiSaver, you have to be in KiwiSaver for at least three years before you can use KiwiSaver as a deposit or part of a deposit to buy a home.

It’s important to understand that if you use your KiwiSaver to buy your first home, you may also be able to get a HomeStart grant from the Government through a Welcome Home Loan.

You do not have to get a Welcome Home Loan, and you can go to other lenders, but that means you would not be eligible for the HomeStart grant.

The HomeStart grant is up to $10,000 to buy an existing/older home or $20,000 to purchase a new property.

Let’s look at the way the Welcome Home Loan works.  There is a maximum income cap to be eligible under the Welcome Home Loan.

  1. For a single person, you can earn up to $85,000 before tax per year.
  2. For joint borrowers where there is a combined income, that cannot exceed $130,000 before tax per year.

When using a Welcome Home Loan, there is a maximum cap for purchasing an existing home and one for a new home.  The caps are based on the purchase price and vary from $400,000 to $650,000 depending on where you are buying in New Zealand.

The Welcome Home Loan does have its limits, but if it helps you buy your own home, then it is something you should consider, especially if you can get a HomeStart grant.

How much do you have in KiwiSaver?

If you are using your KiwiSaver as a deposit and you want a Welcome Home Loan, then you will need a 10% deposit.  The first thing you need to do is find out how much you can withdraw from your KiwiSaver account to use as a home deposit.  Contact your KiwiSaver provider to find out how much you are allowed to withdraw for this purpose.

The next thing to do is to contact us and let us know what this amount is, so we can assess you financially to make sure you meet all the other criteria to buy a home. 

Why join KiwiSaver?

If you have not yet joined KiwiSaver, then you are missing out on getting Government contributions towards your retirement.  If you contribute $1042.86 (approx. $20 per week) each year into your KiwiSaver, the Government will give you a member tax credit of $521.43.

If you stop and think about that for a moment, that means you have made 50% on your $1042.53, that’s smart investing and any investment returns you get on that money as well.

What to do next?

Whether you want us to arrange a Welcome Home Loan for you, or get an approval from another lender, or maybe you want to join KiwiSaver, please contact us, and we can help you decide what is best for you and what is the maximum you can buy with or without a Welcome Home Loan.

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