Kāinga Ora First Home Loan: 5% deposit, income caps and costs

A Kāinga Ora First Home Loan lets eligible first home buyers buy with a 5% deposit, through participating lenders. Income before tax over the last 12 months must be no more than $95,000 for a single buyer without dependants, or $150,000 for a single buyer with dependants or for two or more buyers combined. There is a premium of 1.2% of the loan for applications received by lenders after 1 July 2025 (Kiwibank passes on 1.00%). On a $750,000 home, the deposit is $37,500 and the premium on a $712,500 loan is $8,550 ($7,125 at Kiwibank). National's promise of a $300,000 income cap is an election promise, not law. Banks decide; this is general information, not financial advice.

What the First Home Loan is

The First Home Loan is a government scheme run by Kāinga Ora. The loan itself comes from a bank or other participating lender, on its usual terms, but Kāinga Ora provides insurance to the lender (that is what the premium below pays for), which lets the lender accept a deposit of just 5%. HUD's summary: "First Home Loan reduces the deposit requirement to 5% for eligible first home buyers."

Because Kāinga Ora loans are exempt from the Reserve Bank's LVR limits, a First Home Loan does not use up a bank's low-deposit allowance. Secondary sources also say it is exempt from the debt-to-income limits; we could not confirm that on official text. The lender still checks that you can afford the loan at its test rate.

Who can get one

Sources: Kiwibank's First Home Loan page (accessed 10 November 2026) and interest.co.nz (6 September 2026). The other main conditions we found:

• Deposit of at least 5%. Your KiwiSaver first-home withdrawal can count towards it.
• You must live in the home. It cannot be bought as a rental (Kiwibank).
• No house price caps. Price caps were removed; a Kāinga Ora report says from 1 June 2022, and Kiwibank's page lists none. We could not confirm this on a Kāinga Ora page, which blocked our checks, so treat it as reported.
• A participating lender. As reported by RNZ on 18 February 2026: ASB (newly joined), Co-operative Bank, Kiwibank, Nelson Building Society, NZHL, SBS, Unity and Westpac. ANZ and BNZ do not offer it.

Kāinga Ora and the lender set the full criteria, including what counts as a first home buyer. Check with them before you rely on eligibility. Our first home buyer planner checks the income cap for you.

The premium: 1.2% of the loan

For applications received by lenders after 1 July 2025, the First Home Loan insurance premium is 1.2% of the loan, up from 0.5%. Kāinga Ora's FAQ explains that the government used to pay the rest of the cost (0.7%) and that "Borrowers will continue to have the option of paying this upfront or across the lifetime of the loan."

The cost to you depends on the lender. Kiwibank says it passes on "1.00% of the loan amount", which "can be added to the loan". Ask each lender what it charges and how.

The premium rise was debated during the 2026 election campaign (ODT, 7 September 2026). It is set as a share of the loan when you borrow, which makes it different from a bank's low equity premium, charged as a yearly rate while your LVR is above 80%. Our low deposit guide compares the two.

Worked example: two buyers, and one

Both examples use our engine at the average test rate of 6.94% over 30 years (test rates confirmed July 2026), with take-home pay worked out at 2026/27 PAYE rates, the ACC levy and KiwiSaver at 3.5%.

Two buyers earning $65,000 each ($130,000 combined, under the $150,000 cap). They want a $750,000 home and have $37,500, exactly 5%. Living costs are $3,200 a month and they have no other debts.

• Take-home pay $8,311.26 a month, surplus $5,111.26, so serviceability supports about $772,937.
• The 95% limit on a $37,500 deposit is $712,500, so the deposit binds.
• The DTI ratio would be about 5.5, inside 6 in any case.
• Premium: $8,550 at 1.2%, or $7,125 at Kiwibank's 1.00%.

One buyer earning $85,000 (under the $95,000 cap). Take-home pay is $5,217.57 a month; living costs $2,000; deposit $30,000.

• The 95% limit on $30,000 is $570,000.
• Serviceability supports about $486,569, lower, so it binds. That points to a price of about $516,569.
• Premium on that loan: $5,838.82 at 1.2%, or $4,865.69 at 1.00%.

The second example is the common case: a 5% deposit opens the door, but income still sets the size of the loan. Our borrowing calculator has a First Home Loan option, and the how much can I borrow guide explains the three limits.

First Home Loan or a bank low-deposit loan?

On the same $750,000 home with a 5% deposit ($37,500) and a $712,500 loan, the two routes cost differently:

For eligible buyers, a cost set once as a share of the loan against one charged as a yearly rate is a big difference, which is why the First Home Loan is usually the first route to check. Low equity premiums are set by LVR band; ask each lender how and when it reviews them. You apply for a First Home Loan through a participating lender, which can tell you what it needs. Our first home buyer planner works out the premium and the deposit for your price.

National's $300,000 income cap: a promise, not law

Before the 7 November 2026 general election, National promised to raise the First Home Loan income cap to $300,000 "for all applicants" if re-elected (interest.co.nz, 6 September 2026). As at 10 November 2026, only preliminary election results were available, official results were due on 27 November 2026, and no government had formed.

So the caps today are still $95,000 and $150,000. A promise could change in coalition talks, be delayed or not happen. We will update this guide if the law changes. Do not plan a purchase around the $300,000 figure until it is in force.

Related schemes, open and closed

• KiwiSaver first-home withdrawal: open. After 3 years of membership you can usually withdraw all but $1,000 towards your deposit. See our KiwiSaver withdrawal guide.
• First Home Grant: closed to new applications on 22 May 2024. We found no replacement grant for 2026.
• First Home Partner (shared ownership): Kiwibank says the scheme is "currently fully subscribed" and Kāinga Ora is not accepting new applications. We could confirm this only on Kiwibank's page, so check with Kāinga Ora.

Our first home buyer steps guide puts these in order. Banks decide; this is general information, not financial advice.

Questions people ask

What are the First Home Loan income caps?

$95,000 before tax over the last 12 months for a single buyer without dependants, and $150,000 for a single buyer with dependants or for two or more buyers combined (Kiwibank, accessed 10 November 2026).

Is there a house price cap?

No price caps are listed. They were reported removed from 1 June 2022; we could not confirm this on a Kāinga Ora page.

How much is the First Home Loan premium?

1.2% of the loan for applications received by lenders after 1 July 2025, up from 0.5%. It can be paid upfront or over the life of the loan. Kiwibank passes on 1.00%, which can be added to the loan.

Can I get a First Home Loan from ANZ or BNZ?

No. As reported in February 2026, lenders include ASB, Co-operative Bank, Kiwibank, Nelson Building Society, NZHL, SBS, Unity and Westpac.

Has the income cap gone up to $300,000?

No. National promised it before the November 2026 election. As at 10 November 2026 no government had formed, so it is a promise, not law.