1. Set your target

You can’t plan your savings until you know the number. Most banks want 20% for an existing home, but many first home buyers buy with less. With a Kāinga Ora First Home Loan, you may need as little as 5%, and some lenders accept 10% or less for new builds. Read 5%, 10% or 20% deposit: what you need, then use our how soon can I buy calculator to set a target date.

2. Make KiwiSaver do the heavy lifting

For most first home buyers, KiwiSaver is the biggest part of the deposit. After three years as a member, you can usually withdraw everything except $1,000 to buy your first home.

• Your rate: the default rate is 3.5% of your pay, and your employer contributes too. If you can afford more, 4%, 6% or 8% grows your deposit faster.
• The government contribution: put in at least $1,042.86 between 1 July and 30 June to get the full $260.72 a year.
• Your fund: if you’re buying in the next year or two, check your fund isn’t taking more risk than suits a short timeframe.
• Couples: you can each make a withdrawal, which often covers most of a 5% deposit.

See how the withdrawal works on our KiwiSaver first home withdrawal page.

3. Save automatically on payday

Set up an automatic transfer into a separate savings account on the day you’re paid, before you have a chance to spend it. A savings account that’s harder to dip into, such as a notice saver or a term deposit, can help too.

4. Put windfalls straight into the deposit

Unexpected money is the easiest money to save, because you never got used to spending it.

• Tax refunds: after the tax year ends on 31 March, Inland Revenue works out many people’s tax automatically, and refunds are paid into your bank account. Check myIR and send any refund to your deposit.
• Bonuses and pay rises: when your pay goes up, increase your automatic savings by the same amount.
• Gifts: birthday or Christmas money from family.
• Holiday pay and overtime: extra pay you didn’t budget for.

5. Cut your biggest costs

Small savings add up, but the big costs make the real difference.

• Rent: living with family for a year, or sharing with a flatmate, can add thousands to your deposit.
• Cars: do you need two? Avoid new car finance while you’re saving.
• Bills: compare power, phone and broadband plans, and cancel subscriptions you don’t use.
• Groceries: plan meals and do one big shop a week.

6. Clear high-interest debt

Credit cards, buy now pay later and personal loans cost you interest, and lenders count them when working out how much you can borrow. Even an unused credit card limit can reduce what a bank will lend. Paying these off, and closing cards you don’t need, can help your deposit and your borrowing at the same time.

7. Earn a bit extra

• Pick up overtime or extra shifts.
• Start a small side hustle using a skill you already have.
• Sell things you no longer use on Trade Me or Facebook Marketplace.
• Take in a boarder or flatmate if you have the space.

8. Ask about family help

Many first home buyers get help from family. Two common ways are:

• A gifted deposit: family give you money that doesn’t need to be paid back. Lenders usually want a signed gift letter.
• A family guarantee: a family member uses the equity in their home to help secure part of your loan, so you need a smaller deposit. It carries real risk for them, so everyone should get independent legal advice.

9. Check whether you qualify for a First Home Loan

The Kāinga Ora First Home Loan lets eligible buyers purchase with a 5% deposit through participating lenders. There are income caps, so check the current criteria on the Kāinga Ora website or ask us. Read more in how much deposit do you actually need?

10. Track your progress every month

Pick a day each month to check your savings, KiwiSaver balance and spending. Seeing the number grow keeps you motivated, and you’ll spot problems early.

Don’t forget the other costs

As well as the deposit, set aside money for legal fees, a building inspection, a LIM report, moving costs and house insurance. Many buyers allow a few thousand dollars for these.

Want help putting a savings plan together? Our team can show you how close you are and what you’ll need. See our first home buyer guide for South Auckland for the full process.

This article is general information only and isn’t financial advice. Talk to an adviser about your situation before making decisions.