New Zealand Doubles First Home Buyers at 5% Deposits

For thousands of New Zealanders, the dream of owning a home just got closer to reality.

Nearly 12% of first home buyers are now purchasing properties with just a 5% deposit, according to new analysis from Infometrics. That's more than double the rate from ten years ago, opening doors for families who once thought homeownership was out of reach.

The government's First Home Loan scheme, managed by Kāinga Ora, now underwrites over $7 billion in loans for buyers who started with 5% deposits. That represents 13,757 borrowers who found a pathway to ownership without the traditional 20% down payment.

Between July 2025 and April 2026 alone, the program approved 7,761 new applications while declining just 30. The explosive growth followed a game-changing 2022 decision to remove house price caps, allowing eligible borrowers to use the scheme for properties of any price.

Qualification rules remain straightforward: single buyers can't earn more than $95,000 annually, while couples are capped at $150,000. Even at the upper limit, that income level supports borrowing around $900,000, enough for a solid first home anywhere in the country, including Auckland.

The program works remarkably well for both buyers and taxpayers. Default insurance costs less than $1 million annually across the entire portfolio. Borrowers pay a one-time insurance fee of 1.2% of the loan amount to collectively cover the risk.

Regional areas are seeing the biggest impact. In Hawke's Bay, these 5% deposit loans account for 7.5% of all home sales. Southland hits 6.5%, while Auckland and Wellington sit below 4%.

The Ripple Effect

The surge in accessible homeownership is transforming communities beyond individual families. More first-time buyers means more stable neighborhoods, better school funding, and stronger local economies as young families invest in their communities.

Chief forecaster Gareth Kiernan from Infometrics points out the market has fundamentally shifted from the frenzied 2021 pace. "There's no rush," he says. "It's not like that pressure where if you didn't buy today, it was going to be another $20,000 more expensive tomorrow."

The program demonstrates what happens when barriers drop and opportunity expands. Borrowers still need to prove they can afford their mortgages, but the traditional 20% deposit requirement no longer keeps qualified buyers on the sidelines for years.

For thousands of New Zealand families, the keys to their first home are finally within reach.