How to Buy Your First Home in NZ – Step by Step Guide
Buying your first home is an exciting milestone, but it can also feel overwhelming if you don’t know where to start. At Vesta Finance & Advisory, we specialise in guiding first home buyers through every step of the process, from understanding what you need for a pre-approval to celebrating settlement day with the keys in hand.
Whether you’re just starting to explore the market or ready to make an offer, here’s what you need to know to make confident, informed decisions as a first-time home buyer in New Zealand.
1. Understand Your Financial Position
Before you apply for a mortgage pre-approval, take a clear look at your finances.
Key things lenders look for:
Deposit: Most banks require at least 10% deposit. A 20% deposit helps you avoid Lenders Mortgage Insurance (LMI) and gives you access to better interest rates.
Income vs Expenses: Your income, spending habits, and existing debts (student loans, credit cards, car loans) are all assessed.
Credit Score: A clean credit history builds your borrowing power.
Tip: Download your free credit report and track your spending for at least 3 months before applying.
2. Explore First Home Buyer Support Options
Good news! If you’re a first-time buyer, there’s support available to help you get on the ladder faster.
Support options include:
KiwiSaver First Home Withdrawal: You may be eligible to withdraw a portion of your KiwiSaver savings to use as a deposit toward your home loan.
Kāinga Ora First Home Loan: Available for eligible buyers with as little as 5% deposit. Supported by Kāinga Ora, this scheme allows access to selected lenders with lower deposit requirements and fewer barriers.
Bank of Mum and Dad: Many first home buyers also receive help from family, whether through a gifted deposit or guarantor support.
Make sure to check eligibility criteria and application timelines early in the process.
3. Get Mortgage Pre-Approval Ready
Pre-approval is a conditional green light from the bank indicating how much money you can borrow and put towards your new purchase.
Documents you’ll need to provide:
Proof of income (payslips, salary statements, or financials if self-employed)
Bank statements (3 - 6 months’ worth)
ID and proof of residency or visa (if applicable)
KiwiSaver balance or statements (if using for a deposit)
Details of debts or credit facilities
Pre-approvals are typically valid for 60 to 90 days.
4. Understand Your Buying Power
Your pre-approval amount will depend on several factors, including:
Income and household budget
Existing financial commitments
Deposit size and LVR (loan-to-value ratio)
Property type and location
Tip: Avoid making major financial changes during this time if possible (e.g. new credit cards, job changes), as they can impact your borrowing ability.
5. Work with the Right Professionals
Having the right support team can make the whole process smoother and less stressful:
Mortgage Adviser: Compares banks, secures the best structure and rate, and supports you through pre-approval to settlement. At Vesta, this is our specialty.
Solicitor: Manages legal checks, LIM reports, and the Sale & Purchase Agreement.
Registered Valuer: Required by some lenders to confirm property value, especially with less than 20% deposit or new builds.
Building Inspector: Gives you peace of mind the property is safe and sound.
At Vesta, we can connect you with a trusted network of professionals to support your journey.
6. House Hunting and Making an Offer
Once you’re pre-approved, you can confidently start house hunting.
In NZ, there are 3 common property purchasing methods.
Auction:
You need unconditional finance approval before going to an auction as there are no conditions allowed on the sale.
Always have your finance fully approved and all checks (like LIM or building report) done before the auction.
Only bid if you’re 100% ready to go ahead with the purchase.
Negotiation (via Real Estate Agent or Vendor):
This is when you make an offer through either the agent or the seller.
You can include conditions such as finance terms (if your home loan needs to be approved), building report (to check for any issues with the property), a registered valuation (to confirm the property value), or solicitor approval (to review the sale and purchase agreement).
This is the most common purchasing method in NZ.
Tender: You submit your best offer in writing by a set deadline.
There is usually no advertised price - you're expected to decide what the property is worth to you.
You can include conditions in your offer (e.g. finance, building report, solicitor approval), but unconditional offers are often more competitive.
Once submitted, the seller reviews all offers and chooses the one they prefer.
You may not get a chance to negotiate afterwards, so best to be prepared for this.
This method suits buyers who are prepared and confident, and it’s important to have your finance and checks lined up beforehand.
Before making an offer, always talk to your mortgage adviser and solicitor to ensure you’re including the right conditions for your type of purchase.
7. Final Approval & Going Unconditional
Once your offer is accepted, your lender will assess the specific property and issue final approval.
Conditions the Bank may require:
Registered valuation
Building inspection results
Final Sale and Purchase Agreement
Once the final approval is given, your loan goes from conditional to unconditional.
What is an Unconditional Offer?
It means all checks are done and the sale is locked in. The purchase is now legally binding, and you’re committed to buy.
8. Preparing for Settlement Day
Settlement is the final step where the property officially becomes yours.
Leading up to settlement:
Your solicitor will manage all legal paperwork and liaise with the lender.
Your deposit and any KiwiSaver funds must be in place and ready to go.
You’ll do a pre-settlement inspection to ensure the property is in agreed condition.
On settlement day:
Funds are transferred, documents exchanged, and the keys are handed over.
Congratulations! You’re officially a homeowner!!
9. Don’t Forget to Budget for Post-Settlement Expenses
Owning a home comes with ongoing responsibilities. Be ready for:
Council Rates: These are annual property taxes based on the value of your home.
Home and Contents Insurance: Required by lenders and essential for protecting your asset.
Maintenance and Repairs: Budget for unexpected fixes, property care, and general upkeep.
Utilities: Power, internet, water, and other service costs add up.
Being financially prepared for these responsibilities ensures a smooth transition into homeownership.
Final Tips for First Home Buyers
Start budgeting early and be realistic about your price range
Don’t underestimate additional costs (lawyers, LIM, inspections, moving)
Ask lots of questions and remember, no question is too small!
Explore all first home buyer schemes such as Kāinga Ora and KiwiSaver
Partner with professionals who have your best interests at heart
How Vesta Finance & Advisory Can Help
At Vesta, we’re passionate about helping first home buyers achieve their property goals with confidence and clarity. We’ll help you with:
Pre-approval advice and applications
KiwiSaver withdrawal support
Access to competitive lenders (including Kāinga Ora schemes)
Loan structure planning for long-term success
A supportive team from start to settlement and beyond
Contact us today to get started with your first home journey.
This article is for educational purposes only and is not personalised financial advice. Speak to an adviser about your own position.