How KiwiSaver could help you to buy your first home

From checking your eligibility, to making sure you’ve got the money when you need it, here’s how you might be able to use your KiwiSaver savings to get into your first home.

4 minute read

For many New Zealanders, the journey to home ownership includes making a first home withdrawal from their KiwiSaver account. Like most other aspects of buying a house, there are plenty of things to consider on the KiwiSaver front before, during, and after you’ve made your first home withdrawal.

Here are a few things to think about at each stage.

Before you buy your home

1. Check your eligibility

The last thing you want is to find out you can’t use your KiwiSaver balance. So first, check you meet the following criteria.

• You must have been a member of a KiwiSaver scheme for at least three years.
• You intend on living in the house you’re buying, or are intending to build the principle place of residence for you (or you and members of your family) on the property you have purchased.
• Subject to some exceptions, you don’t already own property and haven't owned any property in the past.
• The property is in New Zealand.
• You haven’t made a KiwiSaver first home purchase withdrawal before.

Visit the KiwiSaver website for more details.

2. Increase your contribution rate

The minimum KiwiSaver contribution for employees is 3.5%. But if you can bump yours up to 4%, 6%, 8% or even 10%, you could find that your account balance (and therefore your house deposit) stacks up much more quickly. Plus, the money is taken out of your pay before it lands in your bank account – so you won’t be tempted to use it for something else.

3. Make sure you’re in the right fund 

Funds that tend to be higher risk, like a Growth Fund, are generally expected to perform better over the long term but can be riskier in the short term. Their value can go up or down significantly in the space of a few weeks or even days. If the value of your chosen fund drops shortly before you make a first home withdrawal you could end up with a smaller deposit than you thought you would have.     

If you’re considering buying soon you might want to consider investing in a fund that is less risky. As a general rule, less risky funds aren’t as likely to go down in value significantly in short time periods, and that might be important if you’re relying on your KiwiSaver balance to be able to buy your first home. For example, the BNZ KiwiSaver Scheme First Home Buyer Fund aims to achieve relatively stable returns over the short to medium term, for those who are planning to withdraw their savings within the next three to five years.

4. Get organised 

KiwiSaver first home withdrawals take time, so give yourself plenty. You can get in touch with your KiwiSaver provider early to check how long it’ll take to process your application, and what your estimated funds might be. 

Some of the money in your KiwiSaver account may not be eligible for withdrawal. For example, you need to leave a minimum of $1000 in your account after you withdraw, and you can't take out any money you may have transferred from an Australian superannuation scheme.

When making a first home withdrawal

1. Get legal advice

A first home withdrawal from your KiwiSaver account is paid to your lawyer’s trust account, and they need to give a letter to your KiwiSaver provider as part of the process. Your lawyer will play an important role, including helping you sort the paperwork and answering any questions you might have.

2. Allow plenty of time

First home withdrawals can be used as part of the settlement, or in some cases as part of paying the deposit. Either way, it takes time for the withdrawal to be processed and for the money to be paid to your lawyer’s trust account. 

To make sure you have enough time, submit your first home withdrawal at least 10-15 working days before the day the withdrawal balance needs to be in your lawyer’s trust account. Consider adding a buffer of a few days if you can.

After you’ve bought your home

1. Take time to celebrate

Congratulations! You’ve made it into your first home. Take time to enjoy the feeling and to get used to your new surroundings. While you’re enjoying this new life stage, there are a couple of things you could consider doing to help kick-start your KiwiSaver account again.

2. Review your contribution rate

Make sure you think about your KiwiSaver contribution rate. Now that you own your house, your weekly expenses will be different than before. If you're employed, you'll contribute at least 3.5% of your pay, but you can choose to contribute 4%, 6%, 8% or even 10%. If you’re self-employed or not currently working, you can choose what you put in.

Remember, if you’re eligible, the Government will contribute 25 cents for every dollar you contribute¹ (between 1 July and 30 June), up to a maximum of $260.72 each year. To receive the full amount, you’ll need to contribute at least $1042.86 between 1 July to 30 June and meet the eligibility criteria.

3. Check you’re in the right fund

The next time you withdraw from your KiwiSaver account could be at retirement, which might be a long time away. Depending on your risk appetite and how long it is till you retire, you might want to consider a higher risk fund, which has the potential to provide higher returns over the long term, and could grow your KiwiSaver balance further than a lower risk fund might.

4. Think about your retirement

Now that you’ve ticked off your first home, you might want to start thinking about retirement plans. Do you know when you’d like to retire, what sort of lifestyle you want, and how much money you’ll need for it?

There’s no doubt that steadily contributing to your KiwiSaver account can get you closer to your future goals. Whether you’re looking to buy your first home, or boost your savings for retirement, being KiwiSaver-savvy helps.


¹Employer contributions, government contributions and amounts transferred from Australia under the Trans-Tasman retirement savings portability rules do not count towards your eligibility for the government contribution.

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BNZ Investment Services Limited, a wholly owned subsidiary of Harbour Asset Management Limited, is the Issuer and Manager of the BNZ KiwiSaver Scheme. Download a copy of the BNZ KiwiSaver Scheme Product Disclosure Statement PDF 1.1MB, or pick up a copy from a BNZ branch.

Investments in the BNZ KiwiSaver Scheme are not bank deposits or other liabilities of Bank of New Zealand (BNZ) or any other member of the National Australia Bank Limited group. They are subject to investment risk, including possible delays in repayment. You could get back less than the total contributed. No person (including the New Zealand Government) guarantees (either fully or in part) the performance or returns of the BNZ KiwiSaver Scheme or the repayment of amounts contributed. National Australia Bank Limited, the ultimate owner of BNZ, is not a registered bank in New Zealand but a licensed bank in Australia and is not authorised to offer the products and services mentioned on this webpage to customers in New Zealand.

BNZ Investment Services Limited (BNZISL) uses the BNZ brand under licence from Bank of New Zealand, whose ultimate parent company is National Australia Bank Limited. No member of the FirstCape group (including BNZISL) is a member of the NAB group of companies (NAB Group). No member of the NAB Group (including Bank of New Zealand) guarantees, or supports, the performance of any member of FirstCape group’s obligations to any party.

References to third party websites are provided for your convenience only. BNZ accepts no responsibility for the availability or content of such websites.

This article is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Neither BNZ nor any person involved in this article accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any information, representation, or omission, whether negligent or otherwise, contained in this publication.