You're planning on saving for your first home, and your KiwiSaver will make up part of your deposit - but how does it all work? It can seem like information overload when you first start looking into using your KiwiSaver as a house deposit. So, we're making it easy for you and covering everything you need to know, all here in one place.
Before we jump in, remember, the team at Advance Mortgage Solutions are here to help. You can book in a KiwiSaver Check Up or talk through your first home ownerships plans here.
Do I qualify to use my KiwiSaver for my first home?
If you meet the below eligibility criteria then it's likely you'll be able to use your KiwiSaver to purchase your first home:
- You have to have been a member of KiwiSaver or in a complying superannuation fund for at least three years
- You must intend to live in your property or on the land that you're buying. That means it can't go towards an investment property that you won't be residing in), and it must be in New Zealand
- You must be buying your first home, or qualify for a second chance home buyer withdrawal. If you have previously owned a home but your financial position is now similar to that of a first home buyer, then you may be eligible. Find out more whether you qualify for a second chance home buyer withdrawal over on the kāinga ora website.
What happens if I’m buying with my partner and they already have a house, do I still qualify?
No worries, it just means that you'll be able to withdraw your KiwiSaver but your partner won't be able to withdraw theirs.
When you start looking for a house, we recommend getting in touch with us, so that we can confirm you are eligible, confirm the balance you will be able to withdraw and understand your timeline.
How do I withdraw my KiwiSaver, is it hard to get it out?
Good news, it's not hard at all! Your first home withdrawal is a really simple process, usually it entails contacting your KiwiSaver provider, filling out a form, and having your lawyer oversee the process. If you don't already have a lawyer, you'll want to find one for the process of buying your first home anyway, so this is just one extra thing they will help with.
How much can I take out?
If you're eligible to use your KiwiSaver to get on the property ladder, then your KiwiSaver withdrawal can be everything in your account except $1,000. So if you're current balance is $30,000, you'll be able to take out and use $29,000. With that said, you can choose to leave more than $1,000 in your KiwiSaver and take out less. Just remember that you can't change your mind and take more out later, the next time you'll be able to make a withdrawal is for retirement (or if you have extreme circumstances).
Am I eligible for a first home grant?
It's worth checking if you meet the eligibility criteria for a first home buyers grant. If you meet the criteria than you could get up to $10,000 extra to go towards your first home. Eligibility is based on whether you're buying as an individual or with others, how much you earn, how long you've been contributing to your KiwiSaver, and whether you’re buying an existing home or a new build. Find out if you qualify for the KiwiSaver Homestart Grant here.
What should I be doing with my non-KiwiSaver savings?
If you have other money invested elsewhere that you're planning on using for your first home deposit (e.g. through platforms like Sharesies or Hatch), then the same risk rules as your KiwiSaver apply. You'll likely want to cash out of your investments so that you have the money ready, rather than leaving it invested and risk losing a large portion of it if the markets take a dive.
Should I wait to sort my KiwiSaver out until after I’ve bought my first home?
No way! The sooner you get your KiwiSaver fund selection right and suited to your current goals the better. Unless you're buying a house within the next month, then there's still time to change funds or even KiwiSaver providers. Sorting it out now means less surprises for you down the line, and while it can seem daunting at first, changing funds or providers is usually a quick and easy process. Plus, with all of the new responsibilities that come with owning your own home for the first time, why not sort it now instead of when you have your hands full.
Like to get started?
We're here to help. Book a KiwiSaver Catch-Up with the team at Advance mortgage solutions. Time well spent to start to check in on your KiwiSaver plan and how it is tracking for your home ownership plans.