Nau mai, haere mai. On 1 October, Housing New Zealand joined HLC and KiwiBuild to form Kāinga Ora – Homes and Communities.

Information on this site is still current. For more information about Kāinga Ora visit the Kāinga Ora website.

Check you are eligible for First Home Loan

Published: 1 October 2019

As well as having a 5% deposit, you need to meet certain criteria including an income cap and regional house price cap. You will also need to meet the specific lending criteria of the participating lender you choose.

The criteria are listed below along with an easy guide to check at a glance if you are eligible to apply.

  • Income cap - You can have a maximum yearly income of up to $85,000 (before tax) for 1 person. Or a combined maximum yearly income of $130,000 (before tax) for 2 or more people.
  • Minimum deposit - You will need a minimum 5% of the purchase price of the house you are wishing to buy.
  • House price cap - The price of the house you are buying with a First Home Loan must be less than the regional house price cap.
  • First home buyer - Or a previous home owner, in a similar financial position to a typical first home buyer.

Maximum income

To be eligible for a First Home Loan your household income for the last 12 months must have been $85,000 or less (before tax) if you are the sole borrower. If you are teaming up with one or more borrowers to buy a house, then you can have a combined household income up to $130,000 (before tax) in the last 12 months.

Key bank lending criteria

In addition to meeting the governments criteria for a First Home loan, you will also need to meet the lending criteria of your bank or credit union before your loan can be made.

Participating lenders may have slightly different lending criteria but they will include your financial ability to repay the loan, your level of debt, your credit history and the way you’ve conducted your bank accounts in the past.

Other criteria

  • You must live in the home you are buying. A First Home Loan cannot be used to buy an investment or rental property.
  • You cannot own any other property.
  • You will need to pay a Lender’s Mortgage Insurance (LMI) premium of 1% of the loan account. The lender may also apply a loan application fee. In most cases these fees can be built into the home loan. Talk to your participating lender to see what applies.
  • You are a New Zealand citizen or permanent New Zealand resident or a resident visa holder who is ordinarily resident in New Zealand.
  • While an age restricition is not part of the standard eligibility criteria for a First Home Loan, in general participating lenders will require applicants to be a minimum of 18 years of age.

The house price caps

Region

House price cap for existing/older properties

House price cap for new properties

Auckland, Queenstown Lakes District $600,000 $650,000
Hamilton City, Tauranga City, Western Bay of Plenty District, Kāpiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Tasman District, Nelson City, Waimakariri District, Christchurch City, Selwyn District $500,000 $550,000
Rest of New Zealand $400,000 $500,000

What about if I want to build a house?

Some participating lenders allow you to build a new house with a First Home Loan. Please ask your preferred lender if they do and what their criteria is.

Maximum amount you can borrow

The maximum amount you can borrow with a First Home Loan depends on the region you are buying in. Each region has a house price cap. The maximum loan for that region is the house price cap less your 5% deposit.

 

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