The Kāinga Ora First Home Loan: Buying With a 5% Deposit
The First Home Loan lets eligible buyers purchase with a 5% deposit, because Kāinga Ora insures the loan for the lender. Here's who qualifies, what it costs and where people get caught out.
What it is
The First Home Loan is an ordinary home loan from a participating bank or lender, underwritten by Kāinga Ora, the government's housing agency. Because the government carries part of the risk, the lender can accept a 5% deposit, and the loan sits outside the Reserve Bank's low-deposit restrictions. It was called the Welcome Home Loan until 2019, and plenty of people still search for it under that name.
It isn't a grant. You borrow the money and repay it like any mortgage. The First Home Grant, which was a cash payment, closed in May 2024. We cover what replaced it in First Home Grant alternatives.
Who qualifies
These are the main criteria as at November 2026. Kāinga Ora sets and changes them, so confirm on its First Home Loan page before relying on them.
| Criterion | Requirement |
|---|---|
| Income, one buyer with no dependants | $95,000 or less before tax in the last 12 months |
| Income, one buyer with dependants | $150,000 or less |
| Income, two or more buyers | $150,000 or less combined |
| Deposit | At least 5% of the purchase price |
| Residency | NZ citizen, permanent resident, or resident visa holder ordinarily living in NZ |
| Ownership | A first home buyer, or a previous owner in a similar financial position to one |
| Use | You must live in the home |
The regional house price caps that once applied were removed in 2022. Each lender still decides how much it will lend you based on your income.
Changes to the income caps were proposed during the 2026 election campaign. If you're close to a cap, check the current figure before ruling yourself in or out.
What it costs
Kāinga Ora charges a lender's mortgage insurance premium on the loan, which the lender passes on to you. It's a percentage of the amount borrowed and can usually be added to the loan. The rate has changed over time, so ask for the current figure when you apply.
Interest rates are set by each lender. Some charge standard rates on First Home Loans and others add a margin, so the cheapest lender overall isn't always obvious.
Where people get caught out
- Passing the income cap doesn't mean passing the bank's test. The lender still checks affordability. A household under the cap can find the loan it needs is more than the lender will approve.
- Only some lenders offer it. You apply through a participating lender, not Kāinga Ora. The list is on Kāinga Ora's site.
- The 5% can't all be borrowed. Savings, KiwiSaver and gifts count. A personal loan for the deposit doesn't.
- Income is the last 12 months. A pay rise or overtime-heavy year can put you over.
Is it the right route for you?
If you're under the cap with a 5% deposit, it's usually the easiest way in. If you have 10% and a strong income, compare it with a standard bank low-deposit loan, which may come out cheaper once the insurance premium is counted. And if you're buying new, the new-build exemption might get you there without the scheme. Our guide to low deposit home loans sets the options side by side.
This article explains how New Zealand lenders generally assess these situations. It is general information, not personalised financial advice, and lender policy changes often — check your own position with a registered adviser. Official sources: Reserve Bank of New Zealand for lending policy and the OCR, and Sorted.org.nz for independent government-backed money guidance.
First Home Loan: common questions
Wondering if you qualify?
Tell us your income, deposit and who's buying. We'll check the First Home Loan against the other low-deposit options and tell you which is cheapest for you.
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