Using Your KiwiSaver Towards Your First Home Deposit

For many first home buyers in New Zealand, KiwiSaver ends up being one of the biggest single contributions to their deposit — sometimes bigger than years of separate saving. If you're getting close to buying your first home, it's worth understanding exactly how the KiwiSaver withdrawal works, what you're entitled to, and how it fits into your overall deposit and lending plan.

Here's a plain-English rundown.

Am I eligible?

To withdraw your KiwiSaver for a first home, you generally need to meet three conditions:

You've been a KiwiSaver member for at least three years.
You're buying a home to live in — not an investment property.
You haven't owned property before, or you qualify for a "second-chance" withdrawal if Kāinga Ora assesses your financial position as similar to a first home buyer's.

If you and your partner are both buying together, you can each apply individually — so long as you each meet the criteria.

How much can I withdraw?

You can access almost all of your KiwiSaver balance, including:

Your own contributions
Your employer's contributions
Government contributions
Any investment returns on the account

The only catch is you need to leave a minimum of $1,000 in your account. There's no cap on how much you can withdraw, and there's currently no house price cap either — so the full balance (minus that $1,000) can go towards your deposit.

If you're buying with a partner, you can combine both withdrawals. Two buyers with, say, $25,000 each in KiwiSaver could add roughly $48,000–$50,000 combined to their deposit — which can be the difference between sitting below or above the 20% deposit threshold, and that matters for both loan approval and the interest rate you're offered.

How does the money actually get used?

Your KiwiSaver withdrawal is paid to your solicitor's trust account, not to you directly, and your solicitor puts it towards your deposit or settlement funds. You don't need to wait until your sale and purchase agreement is unconditional — you can apply for the withdrawal while it's still conditional, so the funds are ready in time for settlement.

The application goes through your KiwiSaver provider (not Inland Revenue or Kāinga Ora, unless you're using a second-chance withdrawal), and typically takes 10–15 working days to process. Given that, it's worth applying at least 4–6 weeks ahead of your settlement date so there's no last-minute pressure.

What about the First Home Grant?

Worth flagging: the First Home Grant closed permanently in May 2024, so it's no longer part of the picture. The Kāinga Ora First Home Loan — which allows eligible buyers to purchase with as little as a 5% deposit — is still available through a number of lenders, and can work alongside your KiwiSaver withdrawal if you qualify.

A few things to plan around

It's a one-time use. Once you've made a first home withdrawal, you can't do it again for a future purchase.
It's not extra money on top of your deposit — factor it into your overall numbers early, rather than treating it as a bonus once you're further along.
Rules and thresholds can shift, so it's worth confirming your specific numbers with your KiwiSaver provider before you commit to a settlement date.
After settlement, it's worth reviewing your KiwiSaver fund type — your risk tolerance for retirement savings may look different once you own a home.

Getting the timing right

The biggest value in using KiwiSaver well isn't just the withdrawal itself — it's making sure it's factored into your deposit and loan application from the start, so there are no surprises with timing or amounts when it matters most.

If you're weighing up how your KiwiSaver balance fits into your deposit, and what that means for your borrowing power, I'm happy to run through the numbers with you — free of charge, and with access to over 30 banks and lenders to compare. Get in touch with Arun today.