Should you withdraw KiwiSaver savings to pay for your first home?

Using your KiwiSaver savings to get on the property ladder can be a great opportunity but deciding if it’s the right move for you requires some thought.

4 minute read

You’ve worked hard to build your KiwiSaver balance. Using it to buy a home could be a great step forward, although it’s important to really think about how that might affect your long-term goals, especially your retirement.

There’s no one-size-fits-all answer, but there are a few important things to consider before you decide.

KiwiSaver could give you a head start

Getting on the property ladder is one of the biggest financial milestones many New Zealanders aim for. Your KiwiSaver savings could help you get there sooner.

If you’re eligible, you can withdraw most of your balance to put towards a first home. For many people, that can be the difference between buying now or waiting longer while continuing to rent and save.

Importantly, using KiwiSaver savings for a first home doesn’t mean giving up on saving for retirement. Once you’ve bought your home, you can keep contributing and continue to receive employer and government contributions (if you’re eligible).

But there are trade-offs to think about

Taking money out of your KiwiSaver account now reduces the balance of your retirement nest egg, and that means less time for those savings to grow through compounding returns. Over time, that can make a big difference.

Buying a house also changes how accessible your money is. Once that money is tied up in your home, you’d need to sell or borrow against your property to have access to the cash.

Plus, it’s worth remembering, while home ownership is often seen as a stable investment, property values can fluctuate just like any other asset.

Planning for the future looks different for everyone

New Zealand Superannuation, which you may refer to as your pension, was designed around the idea that people would retire mortgage-free at 65 years old. But that’s not always the case anymore - especially as living costs rise, people live longer, and home ownership rates fall. So, it’s a good idea to think ahead about how you’ll fund the kind of retirement you want.

Withdrawing your KiwiSaver savings for a home doesn’t mean you’re off track, but it does mean planning ahead becomes even more important.

Check out our article, ‘How much do we really need to save for retirement?’ for helpful tools and insight on planning for your future.

A balanced approach 

If you do decide to use your KiwiSaver savings to help buy your first home, it’s a good idea to keep contributing afterwards. That way, you continue to grow your balance, while still benefiting from contributions from your employer and the Government (if you meet the criteria). Bear in mind, you will also need to cover home loan repayments and other additional overheads that come with being a homeowner.

Owning a home and having a KiwiSaver account means you’re building different kinds of assets, which can help support a more secure financial future.
Try our KiwiSaver calculator to explore what your balance could look like at retirement with or without a first-home withdrawal.

So, is it the right move for you?

Using your KiwiSaver account to buy your first home can be a smart step forward, but depending on your situation, it might make more sense for you to keep building your balance and explore other ways to fund a deposit.

It depends on your goals, your financial position, and your timeline. What matters most is that you understand the pros and cons to make a decision that’s right for you.

Before you decide, ask yourself:

•    Am I eligible to use my KiwiSaver account for a first home?
•    How will this decision affect my future retirement?
•    Am I ready to keep contributing to my KiwiSaver account after I buy?
•    Have I explored other deposit options, like a savings account or family support?

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Whether you’re starting your home buying journey or thinking about the long game, we’re here to help. From tools and resources to expert advice, we’ll support you every step of the way.

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This article is solely for information purposes. It’s not financial or other professional advice. For help, please contact BNZ or your professional adviser.
No party, including BNZ, is liable for direct or indirect loss or damage resulting from the content of this article. Any opinions in this article are not necessarily shared by BNZ or anyone else.

BNZ Investment Services Limited, a wholly owned subsidiary of Harbour Asset Management Limited, is the Issuer and Manager of the BNZ KiwiSaver Scheme. 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.