First Home Buyers in NZ: What You Need to Know in 2025

Buying your first home is one of the biggest financial steps you’ll ever take. The good news is that in 2025, you don’t always need a 20% deposit to get on the ladder. Many buyers are purchasing with just 10% — and in some cases even 5% — deposits, depending on their situation. With interest rates easing and more competition between banks, this could be the right time to take the first step.

Deposit Options for First Home Buyers

Saving a deposit can feel like the hardest part of buying a home, but there are options available:

• 10% deposit loans: Many first home buyers are approved with 10% deposits. This is becoming a common pathway into the market.

• Kāinga Ora First Home Loan (5% deposit): If you meet the eligibility criteria, you may be able to buy with as little as a 5% deposit. This option is especially useful for those struggling to save a large amount.

• KiwiSaver First Home Withdrawal: If you’ve been in KiwiSaver for at least 3 years, you may be able to withdraw most of your balance to put toward your deposit.

• Shared ownership or private low-deposit programs: In some cases, these can help bridge the gap if you don’t have the full deposit required by a bank.

How Banks Assess Home Loans in 2025

While a 10% or 5% deposit is enough to get started, banks also need to be confident you can afford the repayments. To be safe, they currently test applications at around 8.50% interest rates.

When reviewing your loan, lenders look at:

• Your income and job stability

• Living expenses and household budget

• Existing debts like credit cards, car finance, or personal loans

• Number of dependents

• Credit history and account conduct

If you’re self-employed, lenders will also require business financials and recent tax returns.

Common Mistakes First Home Buyers Make

To avoid delays or declines, steer clear of these common pitfalls:

1. Taking on new debt right before applying

2. Submitting incomplete documents such as missing statements

3. Relying on only one bank instead of exploring options

4. Forgetting about extra costs like legal fees and insurance

5. Waiting too long to seek advice, which can mean missed opportunities

Why Work With a Mortgage Broker?

Getting into your first home doesn’t have to be overwhelming. A mortgage broker can:

• Connect you with banks that approve 10% deposit lending

• Guide you through the Kāinga Ora 5% deposit loan if you’re eligible

• Help you use your KiwiSaver (after 3 years membership) to maximise your deposit

• Negotiate sharper rates and cashback offers

• Support you through every step from pre-approval to settlement

Final Thoughts

The idea that you need 20% to buy a home is outdated. In reality, many first home buyers are getting into the market in 2025 with just 10% or even 5% deposits. With interest rates easing and competitive loan options available, the dream of home ownership could be closer than you think.

If you’re ready to buy your first home, now is the time to check your borrowing power and put a plan in place.

Want to know how much you could borrow?
Contact us today for a free, no-obligation chat and let’s get you into your first home sooner.