Ground breaking news for First Home Buyers from 1st October 2019


Housing New Zealand has announced exciting changes for First Time Home Buyers, reducing the deposit to 5%, increasing the maximum yearly income to qualify together with increasing house price caps. You will still need to meet specific lending criteria required by the participating lenders. 

Welcome Home Loan now has a new name. Now it’s known as the First Home Loan.

KiwiSaver HomeStart is also changing its name to First Home Grant.

First Home Loan

First Home Buyers can now apply for a First Home Loan with only a 5% deposit. This is for new and existing homes.

The  “cap on multiple buyers” has also been removed.  This means where there are 4 people buying a house together each applicant can now apply for a First Home Loan.

4 siblings decide to buy a house together each one of them can now apply for a First Home Grant giving them up to $40,000 towards their deposit.  ($10,000 each)

First Home Grant

When applying for your First Home Grant you will only need to have a 5% deposit.

Buyers are no longer required to live in the home for three years if they are buying a studio or one-bedroom home. They can sell after 12 months.

Up to 10% of KiwiBuild homes in each development can be over the price cap if they have four or more bedrooms.

This will really help where extended families want to buy together, they can pool their resources to build or buy their dream home.

There have been no changes to existing house prices caps or income restrictions under the rebranded First Home Loan scheme.

Second Chancers

The asset limit for “second chancers” has been removed.  You are now able to have other assets which will not be asset tested.  However, you will not be able to own a home.

Key bank lending criteria

In addition to meeting the Government's criteria for a First Home Loan or grant, you will also need to meet the lending criteria of your bank or credit union. 

If you are interested in finding out more about any of the First Home Loan schemes, contact First Step Home Loans.  We are experienced advisers who can guide you through the mortgage process and ensure you fully understand your finance options.

The key changes are


Previous Rules

New Rules

Buyers must commit to live in the home for three years

Buyers of studio and one-bedroom homes commit to live in the home for one year


All homes must be priced below price caps, resulting in low numbers of four bedroom and larger homes.

Up to 10% of Kiwibuild homes in development can be over price cap if they are four-bedrooms or more.


People who have previously owned homes “second chancers” cannot have assets worth more than 20% of the relevant First Home Grant price cap for an existing home.

No asset limit for ‘second chancers’. They will still have to not currently own a home and meet the other criteria including an income test.

Extending Home Ownership Support

Previous Rules

New Rules

First Home Grant is capped at twice the individual cap for each property bought by three or more buyers.


The cap on multiple buyers will be removed.

The First Home Loan deposit requirement is currently at 10%

Deposit requirement for First Home Loan reduced for new and existing homes to 5%


Deposit requirements for First Home Grant for existing and new homes is set at 10%


Deposit requirements for First Home Grant reduce for new and existing homes to 5%

Examples of households benefiting from the reset

Currently they are only able to get two Home Start grants at $20,000

Under the Home Start

A family with 4 incomes (3 full time and one part time) Earning a total of $130,000 in Auckland. Looking to buy a large new townhouse at $650,000.


They will now be able to get four Home Start grants at $40,000 and with drawing $30,000 from their Kiwisaver, adding to their saving of $20,000 bringing the total to $90,000.


They will be able to borrow from a bank the remaining $560,000 with a fortnightly payment of $1,417 or around 28% of their income.


A 40 year-old “second chancer” relocating to Tauranga, with an asset of $200,000 and an income of $72,000


The individual will now be able to buy a Kiwibuild home and pay it off in 25 years with a mortgage payment of $824 a fortnight.