How to Supercharge Your First Home Deposit in New Zealand
Disclaimer:
The information on this website is for general guidance only and does not constitute financial or investment advice. Always do your own research and seek personalised advice from a qualified financial adviser or mortgage adviser before making financial decisions. All investments carry risk and past performance is not indicative of future results.
Why Your Deposit is Such A Key Part Of Buying Your First Home
For most New Zealanders, the biggest hurdle to buying a first home isn’t finding the property — it’s pulling together the deposit. With a 20% deposit target, this is $160,000 on an $800,000 home. For many first home buyers, that number looks daunting.
The good news is that you don’t necessarily need 20%. Some banks, and products like the Kāinga Ora First Home Loan, allow deposits as low as 5%. Still, the larger your deposit, the better your options: fewer lending restrictions, lower Low Equity Margins (LEM), and access to sharper interest rates.
The key is to use every tool available to accelerate your savings and take advantage of government programmes, employer schemes, and smart providers.
Harnessing KiwiSaver for Maximum Impact
For most New Zealand first home buyers, KiwiSaver is the single most powerful tool in building a deposit. Since its introduction in 2007, KiwiSaver has become the backbone of deposit strategies.
Withdrawing for Your First Home
If you’ve been a KiwiSaver member for at least three years, you may be able to withdraw nearly all your savings (except the $1,000 kick-start). This can easily amount to tens of thousands of dollars that can go straight toward your deposit.
The process involves applying through your KiwiSaver provider and providing a copy of the sale and purchase agreement. Lenders and lawyers are very familiar with the process, but it’s important to factor in processing time — often 10 - 15 working days.
For more detail on how KiwiSaver interacts with your deposit, check our Home Loan Pre-Approval guide, where we cover the key documents and timing.
Wedge: A Modern Deposit Accelerator
Alongside KiwiSaver, one of the most compelling ways to boost your deposit savings is through Wedge. This is not a bank account, but a licensed savings fund managed by Wedge Management Limited, regulated by the Financial Markets Authority and supervised by The New Zealand Guardian Trust Company.
Wedge runs the Wedge Savings Fund, investing your money into wholesale cash and fixed-interest assets — the kind of low-risk, high-quality holdings typically reserved for institutional investors. The fund as at October 2025 offers a "Set Rate" of around 3% p.a., with your interest accruing daily and compounding monthly, a distinct advantage over ordinary savings accounts that often offer under 1.5% p.a.
The benefits for first home buyers are clear. You can access your savings any time with no withdrawal fees or penalties, retain security through the AA credit rating, and take advantage of a fee structure where Wedge earns only if the fund outperforms the published Set Rate.
To start, you simply download the Wedge app, verify your identity (with NZ ID, IRD number, email, phone), then transfer funds in using your Wedge ID as the reference. It's straightforward and takes just a few minutes.
In effect, Wedge gives you savings growth significantly faster than traditional on-call accounts while preserving your access and keeping risk low. Many first home buyers pair their KiwiSaver balance with regular top-ups into Wedge to reach their deposit goal sooner and more efficiently.
Setting Up Smart Savings Systems
While KiwiSaver and Wedge provide big boosts, the day-to-day savings habits you build are just as important.
Automating Savings
One of the simplest ways to grow your deposit is to “pay yourself first”. Set up an automatic transfer from your income account to a high-interest savings account the day your pay goes in. This ensures you save before you spend.
Cutting Lifestyle Costs
For many first home buyers, small sacrifices can add up. Reducing discretionary spending on subscriptions, dining out, or overseas holidays might not feel glamorous, but every dollar saved is a dollar closer to your first home.
We recommend using tools like budget apps or even a simple spreadsheet to track your spending. Our Budget & Savings page provides some tips for clear budgeting that helps you reach your savings goal.
Exploring Government Support Beyond KiwiSaver
Alongside the First Home Grant, Kāinga Ora’s First Home Loan scheme deserves attention. This allows eligible buyers to purchase with just a 5% deposit, with the government underwriting the risk for the lender.
While interest rates are the same as the bank advertised rates, the ability to enter the market earlier can be game-changing. The key is to balance the opportunity with affordability - a smaller deposit means a larger mortgage.
Family Assistance: Gifts and Guarantees
Family support remains a cornerstone of many first home deposit strategies in New Zealand. There are several common ways parents or whānau contribute:
Gifting: A straightforward gift that boosts your deposit. Banks often require a signed “gift certificate” confirming no repayment is expected.
Gifted Loan (without Interest): Similar to a straight gift, however there is an understanding that this will be repaid at a later date (usually at sale of the property or at the point of a refinance, if possible). The key consideration is that it can’t be an interest-bearing loan, as this would need to be included in your home loan servicing.
Guarantees: Parents can use equity in their own home to guarantee part of your loan. This reduces the deposit you need to provide, though it does put the guarantor’s property at risk if repayments aren’t met.
Shared Ownership: In some cases, family members buy into the property as co-owners. It is important to obtain independent legal advice for a shared ownership arrangement.
Growing Your Deposit Through Shares Investment
For buyers with a longer timeframe, investing outside of KiwiSaver can be an option. While higher-risk investments like shares or managed funds aren’t appropriate for money you’ll need in the next two years, they can help accelerate savings if your buying horizon is three to five years.
Share trading providers like Sharesies, Hatch, and Tiger Brokers offer investment apps that can complement your deposit strategy. The key is to match the investment risk with your timeframe and risk profile - and always seek financial advice.
Avoiding Common Deposit Pitfalls
It’s easy to lose momentum when saving for a deposit. Common pitfalls include:
Raiding savings accounts for short-term spending. Protect your deposit by using accounts with withdrawal restrictions or accounts that are not easily accessible.
Not planning for additional costs. Remember that your deposit isn’t the only upfront cost — legal fees, building reports, and moving costs also add up. Seek out some quotes from our Member Offers here to confirm what you’ll need to set aside.
Ignoring Inflation and Rising House Prices. Some buyers set a deposit target but fail to account for changes in the housing market. Keeping an eye on property values in your region and adjusting your savings target accordingly helps ensure your savings strategy stays realistic and on target.
Reviewing Your Progress Regularly
Building a deposit is a journey. Checking in quarterly on your progress helps keep momentum. Review how much you’ve saved, whether your KiwiSaver contributions are on track, and whether additional tools like Wedge could help you bridge the gap faster.
Banks also update their lending criteria regularly, so staying connected with an adviser or lender about deposit requirements is critical. Our Members Area includes tools and resources to help track and boost your deposit journey.
Your Deposit is the Key to Unlocking Home Ownership
Supercharging your deposit isn’t about one magic trick — it’s about combining all the tools available. KiwiSaver provides the foundation, Wedge offers a modern way to access family support, and disciplined savings habits keep you moving forward. Add in government programmes and smart use of gifts or guarantees, and suddenly your dream of buying a first home in New Zealand feels within reach.
By taking action today and using these strategies together, you’re not just saving for a deposit — you’re building the launchpad to long-term financial independence and the security of owning your own home.
Disclaimer:
The information on this website is for general guidance only and does not constitute financial or investment advice. Always do your own research and seek personalised advice from a qualified financial adviser or mortgage adviser before making financial decisions. All investments carry risk and past performance is not indicative of future results.
