To buy a house in NZ, check your eligibility, work out an affordable budget, confirm your deposit and lending options, and choose a property. Have your lawyer review the contract and complete the necessary property checks, then satisfy any purchase conditions and arrange settlement.

The difficult part is often knowing whether you are ready to begin. You might have some savings and a KiwiSaver balance, but still be unsure how those numbers translate into a home you can comfortably own. This guide explains how to buy a home in New Zealand from that starting point. It also covers the current conversation about 5% deposits, with practical questions for first-home buyers considering Auckland townhouses or other types of housing.

1. Set a budget you can live with after moving in

Start with the life you want your mortgage to leave room for. Write down your household’s take-home income and essential spending, then decide what you need to keep available for savings, family commitments and unexpected expenses.

Build an ownership budget that includes loan repayments, council rates, insurance, utilities and maintenance. Add any shared-property charges that apply to the particular home. Request actual figures where possible: a generic online estimate cannot tell you the insurance premium for a specific address.

Try a practice month before committing. Transfer the difference between your current housing costs and your proposed ownership budget into a separate savings account. Notice whether you can maintain the plan without using credit for ordinary spending.

This exercise is a personal budgeting check, not a lending assessment. It can reveal whether an apparently affordable purchase would leave your household feeling permanently stretched.

2. Work out your deposit and the mortgage you would need

A useful starting calculation is purchase price minus your contribution. For example, a $700,000 purchase with a $70,000 contribution needs a $630,000 loan before any financed fees. That calculation describes the funding gap; it does not establish whether a lender will approve it.

Here is how different deposit percentages compare:

Illustrative
purchase price

5%
contribution

20%
contribution

$600,000

$30,000

$120,000

$700,000

$35,000

$140,000

$800,000

$40,000

$160,000

Illustrations only. These figures exclude purchase costs and any loan fees; they are not advertised property prices or lending offers.

Keep money for the transaction outside this calculation. If every dollar goes into the deposit, even a modest moving bill or urgent appliance replacement can become difficult.

Can you buy a house in NZ with a 5% deposit?

Some eligible buyers can use the Kāinga Ora First Home Loan through participating lenders. Current published income limits are $95,000 for a sole applicant without dependants, and $150,000 for a sole applicant with dependants or two or more applicants combined. Eligibility and the lender’s assessment still apply. Westpac also lists a one-off lenders mortgage insurance premium of 1.2% of the loan. Westpac First Home Loan details.

A small deposit lowers the amount you need upfront, but it leaves a larger mortgage for the same purchase price. Ask for the full repayment schedule and all applicable charges before deciding whether the option helps your household.

What about the proposed expansion of 5% deposits?

On 6 September 2026, National announced an election pledge to lift the First Home Loan income cap to $300,000 if re-elected. As checked on 11 September, this remains a proposal rather than an implemented eligibility change. 1News coverage of the pledge.

The likely beneficiaries, if it proceeds, are deposit-constrained buyers whose incomes exceed today’s scheme limits and who can meet the remaining requirements. It would not, by itself, solve insufficient income, high existing debt or repayments that leave no financial breathing room. Those are separate problems to work through with a lender.

3. Check KiwiSaver, ownership eligibility and your support team

Eligible first-home buyers may withdraw KiwiSaver savings after at least three years of membership. You must leave $1,000 in the account, and money transferred from an Australian complying superannuation scheme cannot be withdrawn for this purpose. Ask your provider to confirm your available amount. Inland Revenue’s first-home withdrawal guidance.

Do not include the former First Home Grant in your budget: applications closed in May 2024. Government first-home buying information. If your right to purchase depends on your immigration status, check it early. Overseas investment eligibility and mortgage approval are separate matters; use the official guidance and get legal advice about your situation. LINZ homebuyer eligibility guidance.

Choose your lawyer or conveyancer before a promising listing creates a deadline. A lender or mortgage adviser can help with finance, while a qualified property inspector assesses the building. The selling agent can answer property questions but works for the seller. Settled’s guide to building your buying team.

Give everyone the same timeline. Ask your provider when withdrawal documents are needed, your lawyer when they can review a contract, and your lender what could delay approval. A simple shared checklist is more useful than discovering these dependencies after signing.

4. Confirm lending, then make a focused property shortlist

Conditional loan pre-approval helps establish a search range. The lender normally still needs to assess the property before confirming the loan, so pre-approval is not permission to buy any home within that amount. Settled’s finance confirmation guide.

Ask which documents are outstanding and when the approval expires. Keep copies of the answers alongside your budget, rather than relying on what you remember from a phone conversation.

Next, divide your wish list into essentials and preferences. Essentials might include an accessible entrance, two usable bedrooms or a manageable school run. Preferences could include a second
bathroom or a particular kitchen finish.

For an Auckland search, compare actual addresses rather than suburb reputations. Test the journey you would make on a normal working day. A home that looks convenient on a map can feel different when you include parking, transfers or collecting children.

Visit at different times to understand sunlight, traffic and activity nearby. Council information can also help you investigate planned changes in the neighbourhood. Settled’s neighbourhood research guide.

5. Check what you are buying before committing

Ask your lawyer to review the record of title, the land information memorandum, or LIM, and any relevant council property-file information. These documents answer different questions about ownership, restrictions, council records and the property’s history. Settled’s property homework guide.

Use the inspection to understand the home’s condition and what further investigation might be necessary. If a report identifies an issue, ask what it means for your intended use and budget. A phrase such as “further assessment recommended” deserves a next action, not a mental tick.

For a new townhouse, also request the floor plan, specification, parking arrangements and details of shared access or maintenance. Check whether storage shown in marketing images is actually included. Measure the furniture you already own and see whether doors, stairs and room layouts will accommodate it.

If you are buying off-plan, have your lawyer explain completion requirements, deposit handling, permitted changes and any cancellation or sunset provisions. Ask your lender how a delayed completion could affect finance. The contract needs to support the way you expect the purchase to work.

6. Make an offer with clear terms

The sale and purchase agreement is legally binding. Have your lawyer review the price, deposit, settlement date, included chattels and any conditions before you sign. Conditions may address matters
such as finance or a property inspection, depending on the transaction. Settled’s sale and purchase agreement guide.

Check the contractual deposit separately from your lender’s deposit requirement. Pillar’s published purchase process describes a 10% contract deposit. If your funding plan involves a 5% contribution, discuss the difference and obtain agreement on workable terms before signing. Homes by Pillar’s purchase process.

Auction purchases require earlier preparation because bids are unconditional. Complete the necessary checks and confirm finance for the property before bidding. Settled’s auction buying guide.

7. Prepare for settlement and your first month of
ownership

Arrange a pre-settlement inspection, make sure your purchase funds are ready and put the required insurance in place for settlement. Raise any inspection concerns with your lawyer promptly. Settled’s settlement preparation guide.

On settlement day, the lawyers coordinate payment and transfer of ownership. Collect the keys once settlement has been confirmed. Settled’s explanation of settlement day.

Prepare a first-month folder containing appliance information, useful contacts, payment dates and any agreed follow-up work. Keep your emergency savings accessible. Getting the keys is a milestone;
creating a manageable routine is what makes the purchase work over time.

Who could benefit from buying now, and who may need more time?

A buyer with stable finances, a suitable home and room for unexpected expenses may be ready even without a very large deposit. Another buyer with the same savings could face a different decision
because their income, dependants or planned time in the home differ.

Consider pausing to resolve the numbers if:

  • You need every available dollar for the purchase and have no workable backup for essential costs.

  • You are depending on an unimplemented policy, unconfirmed gift or future pay rise to complete the deal.

  • The repayments only fit if you remove spending that your household is unlikely to sustain without.

  • You expect to move again soon and have not allowed for the costs and uncertainty of buying and selling.

Waiting is not automatically the cheaper choice, and buying sooner is not automatically the better one. Compare the two using your own budget, realistic alternatives and professional advice.

Frequently asked questions about buying your first home

What is the first step to buying a house in NZ?

Establish what you can comfortably spend, then discuss borrowing and deposit options with a lender or mortgage adviser. That gives your property search a practical starting point.

Does a bigger deposit mean I should buy a more expensive home?

No. You can use a larger contribution to reduce the loan on the same property. Decide what level of ongoing commitment suits your household before increasing the search budget.

Should first-home buyers consider a new townhouse?

It is worth comparing if its location, layout, ownership arrangements and full costs suit you. Walk through daily activities such as parking, carrying groceries upstairs and working from home before deciding.

How long does buying a home take?

There is no single timeline. Your search, finance, property checks and contract terms affect it. An off-plan purchase also depends on the agreed construction and completion process.

Explore your next step with Homes by Pillar

If a new Auckland home is on your shortlist, explore Homes by Pillar’s developments
and compare individual plans against your budget and priorities. Use the first-home buyer information to prepare questions about the homes that interest you.

Bring those questions, your preferred timing and your must-have features to the conversation. Specific information makes it easier to work out whether a particular property belongs on your shortlist.

This article provides general information, not personalised financial or legal advice. Confirm current eligibility and property-specific requirements with the appropriate professionals.