For first-home buyers in New Zealand, the recent discussion around wider access to 5% home deposits has created an obvious question:

Should I buy now, or wait to see whether the proposed changes come into effect?

There is no single answer that will suit every buyer.

The proposed change could make the First Home Loan accessible to substantially more people, particularly individuals and couples who currently earn too much to qualify. But waiting for a policy change also means making assumptions about future lending rules, mortgage rates, available homes and the housing market.

The more useful approach is to understand what could change, what will not change, and which part of home ownership is actually holding you back.

First-home buyers do not necessarily need to stop their plans while waiting for the proposed changes. The existing First Home Loan already allows eligible buyers to purchase with a 5% deposit. The proposal would primarily widen income eligibility. Buyers should assess what they can afford under today's rules while monitoring any future changes.

What Are the Proposed 5% First Home Loan Changes?

The first thing to clarify is that a 5% First Home Loan is not a new scheme.

Kāinga Ora already supports First Home Loans that can allow eligible buyers to purchase with a minimum deposit of 5%. Applicants still need to meet scheme requirements and the lending criteria of a participating lender. Current income limits are $95,000 for an individual without dependants, $150,000 for an individual with dependants, and $150,000 combined for two or more buyers.

The recently announced proposal is different.

National has said that, if re-elected, it would increase the First Home Loan income cap to $300,000, widening the number of buyers who could apply. As of 16 September 2026, that proposed $300,000 threshold has not replaced the current rules.

That distinction is important when deciding whether to wait.

Should First Home Buyers Wait for the 5% Deposit Changes?

Waiting could make sense for some buyers, but the proposed policy should not be viewed as a reason for every first-home buyer to stop searching.

The first question should be:

What is stopping you from buying today?

If the only reason you cannot access a First Home Loan is that your income exceeds the existing threshold, the proposed change could materially affect your future eligibility.

But if your challenge is insufficient borrowing capacity, high debt, unstable income or mortgage repayments that already stretch your budget, a higher income cap may not solve the underlying problem.

That is because the proposed change deals primarily with access to the scheme, not automatic access to a mortgage.

Who Could Benefit Most From Waiting?

Consider a couple earning a combined $175,000 a year.

Under today's $150,000 combined income threshold, they would generally fall outside the First Home Loan income criteria.

If a future $300,000 threshold were introduced, income alone may no longer prevent them from applying.

For buyers like this - solid income, some deposit saved, but currently excluded because of the income cap - waiting for confirmed details may be relevant.

The same applies to single professionals earning more than the existing $95,000 individual threshold.

However, any buyer considering waiting should remember that eligibility for the scheme and approval for a particular mortgage are separate questions.

Who May Gain Very Little From Waiting?

Some buyers may already qualify under the existing First Home Loan rules.

If someone currently meets the eligibility criteria, has enough deposit and can obtain suitable finance, the proposed income change may provide little additional benefit.

The same can be true for buyers whose main limitation is borrowing power rather than deposit size.

For example, imagine an $800,000 property.

A 5% deposit is:

$40,000

That could leave approximately:

$760,000 to finance, before applicable fees or premiums.

A 20% deposit on the same property is:

$160,000

That could reduce the mortgage to approximately:

$640,000

So reducing the deposit requirement does not automatically make the overall property more affordable.

Will House Prices Rise if More Buyers Can Use 5% Deposits?

This is one of the most common questions surrounding the proposal.

The most accurate answer is:

It could affect buyer demand, but the policy alone cannot tell us whether house prices will rise or fall.

If more households become eligible for low-deposit finance, the pool of potential buyers could increase, particularly around properties commonly targeted by first-home buyers.

More qualified buyers competing for a limited number of suitable homes can potentially create upward pressure in some segments.

But house prices are influenced by much more than one lending policy.

Mortgage rates, employment, incomes, housing supply, migration, credit availability, listings and buyer confidence all matter.

Recent data illustrates why predicting price direction from one policy change would be unreliable. First-home buyers recently accounted for around 29% of purchases, while QV data reported national residential values falling 1.9% over the three months to the end of August 2026.

The Reserve Bank has also said national house prices have remained broadly flat in recent years and that housing risks are currently contained.

So buyers should be careful with claims that a wider 5% deposit scheme will automatically make prices rise.

Could Waiting Actually Cost More?

Potentially - but equally, waiting could sometimes work in a buyer's favour.

There are several moving parts.

A property available today may no longer be available later. A similar property could become cheaper, more expensive or remain roughly the same.

Mortgage rates can also change.

On 7 September 2026, the Reserve Bank increased the Official Cash Rate by 25 basis points to 2.75%, while noting that household conditions and residential investment remained weak, particularly in Auckland and Wellington.

That is a useful reminder that buyers are not only waiting on housing policy.

They are also exposed to changes in interest rates, lending conditions, property supply and their own financial position.

Trying to perfectly time all of those variables is difficult.

Does a 5% Deposit Mean Buying Becomes Easier?

It can make one part easier:

saving the upfront deposit.

For someone buying an $800,000 home, the difference between 5% and 20% is $120,000.

That is substantial.

But a lower deposit also means starting with a higher loan-to-value ratio and less equity.

Current Kāinga Ora First Home Loan criteria also include a 1.2% Lender's Mortgage Insurance premium, which can be paid upfront or added to the loan, and applicants must still meet the chosen lender's requirements.

This is why buyers should compare the whole financial picture rather than concentrating on the deposit percentage alone.

What About KiwiSaver?

KiwiSaver may already help some buyers reach the required deposit without waiting for a future policy change.

Eligible members who have been in KiwiSaver for at least three years may be able to withdraw qualifying savings for a first-home purchase. At least $1,000 generally needs to remain in the account.

For a couple with significant KiwiSaver balances, that can make a meaningful difference to the amount of cash they need to save separately.

This is worth checking now rather than assuming home ownership is still several years away.

Should Auckland First-Home Buyers Keep Looking at Homes?

For Auckland buyers, researching the market now can still be useful even if they are not ready to purchase immediately.

Understanding what homes actually cost in the suburbs you are considering helps turn an abstract deposit target into a real number.

A buyer may discover that the homes they want are outside their comfortable borrowing range.

Alternatively, they may find that suitable new-build homes in Auckland are closer to their budget than expected.

At Homes by Pillar, first-home buyers can explore new-build options across Auckland and understand the purchasing process before making a commitment.

The goal is not to rush into buying.

It is to replace uncertainty with actual numbers.

What Should First-Home Buyers Do While the Policy Is Uncertain?

Rather than thinking only in terms of “buy now” versus “wait”, buyers can use this period to improve their position.

  • Check whether you already qualify for the current First Home Loan. You may not need to wait for a rule change at all.

  • Confirm your KiwiSaver position. Ask your provider what may be available for a first-home withdrawal.

  • Understand your borrowing capacity. Speak with a participating lender or qualified mortgage adviser rather than estimating from your salary alone.

  • Compare 5%, 10% and 20% deposit scenarios. Look at the mortgage amount and repayments, not just the upfront cash.

  • Reduce unnecessary debt where practical. Existing financial commitments can affect how much a lender may be prepared to provide.

  • Research actual properties within your comfortable budget. This gives you a clearer target for your deposit and borrowing requirements.

  • Monitor official announcements. If the proposed policy progresses, check the final eligibility rules and commencement date before relying on it.

So, Is It Better to Buy Now or Wait?

There is no universal answer.

For someone who already qualifies under today's rules, has stable finances and finds a suitable home within a comfortable budget, a future income-cap change may not materially improve their position.

For someone who is financially ready but excluded solely because of the current income threshold, the proposed change could potentially matter much more.

And for someone whose biggest issue is borrowing capacity, a 5% deposit may not address the real affordability challenge at all.

The most useful question is therefore not:

“Should I wait for the Government to change the rules?”

It is:

“What specifically needs to change before buying a home becomes financially comfortable for me?”

Once you know that answer, it becomes much easier to decide whether waiting is relevant.

Frequently Asked Questions About Waiting for the 5% Deposit Changes

Is the $300,000 First Home Loan income cap available now?

No. As of 16 September 2026, the $300,000 income limit is a proposed policy rather than the current Kāinga Ora rule.

Can first-home buyers already purchase with a 5% deposit in NZ?

Yes, eligible buyers can already access a minimum 5% deposit through the Kāinga Ora First Home Loan, subject to scheme and lender criteria.

Will the proposed changes make house prices rise?

They could increase the number of eligible buyers, but price movements also depend on interest rates, housing supply, employment, lending conditions and broader demand. There is no reliable basis to say the proposal alone will determine future prices.

Does a 5% deposit guarantee mortgage approval?

No. Participating lenders still assess whether applicants meet their lending requirements and can service the proposed mortgage.

Can KiwiSaver be used towards a 5% deposit?

Eligible KiwiSaver members may be able to use qualifying savings towards a first-home purchase after meeting the relevant requirements.

Thinking About Your First Home in Auckland?

If you're deciding whether to buy now or how to buy your first home in NZ? Wait! start by understanding the homes currently available and the numbers that would apply to you.

Homes by Pillar builds new homes across Auckland with options suited to first-home buyers at different stages of their journey.

Explore what's available, understand the process and make your decision when the numbers - and the home - make sense for you.

This article is general information only and does not constitute financial, legal, mortgage or investment advice. Policy proposals, lending rules, interest rates and eligibility criteria can change. Check official information and seek professional advice appropriate to your circumstances before purchasing property.