KiwiSaver Mortgages

Should you use KiwiSaver to buy a first home?

3 MIN READ November 6, 2019
It seems to be a given now that those looking to purchase their first home will use their KiwiSaver savings to help – and this isn’t surprising given the current average house prices in New Zealand. But it’s important to know just what exactly you’re…


If you’re in your 20s or 30s, using your KiwiSaver savings to help purchase your first home can put you in good stead to be mortgage-free before you hit retirement – definitely the ideal situation as New Zealand’s superannuation system was created based on the premise that people would own their own homes at the point of retirement.

If you’re eligible to withdraw your KiwiSaver savings to use for your first home, you’ll be able to access the value of your savings as well as your employer contributions and any returns and tax credits you’ve accumulated. 

KiwiSaver also has a few great initiatives that can be used to help first home buyers get their foot in the door. If you’re eligible for the Welcome Home loan scheme, you only need a 5% deposit to purchase your home. You may also be eligible for a KiwiSaver HomeStart Grant of up to $5,000 per person for an older property or $10,000 per person for a new build.

Most first-home buyers put a lot of effort into saving for a deposit, and this includes potentially increasing their KiwiSaver contribution rate to help accumulate the funds. Because they’re in such a good habit of saving and contributing, it’s likely to be quite easy to get back on track for their retirement savings after withdrawing for a first home.


One of the biggest concerns about using KiwiSaver for your first home is that its purpose is predominantly to help you have a good nest egg when you retire and that withdrawing early may compromise that.

If you start saving when you’re 18 years old but then withdraw your balance at 30, you’ll need to start from scratch again, which means you may end up with less overall come retirement.

Because a mortgage is often quite a large financial commitment, there is also the concern that if you withdraw your KiwiSaver savings to help you out, you may feel as though you can’t afford to keep contributing to it once you begin your mortgage payments. This means that you won’t necessarily be able to retire comfortably when you need to.

If you’re in your 50s and you’re using KiwiSaver to buy a first home, you’ll likely have accumulated quite a large amount that will go a long way to helping you out with your mortgage. This does mean that you likely won’t have much at all come retirement however, so you’d need to factor that in.


KiwiSaver can be a great (and often necessary) means of helping you get into your first home, but it’s important to keep contributing as much as you can once you’ve withdrawn your savings. It’s helpful that we can use our savings for a first home, but we also need to remember that it’s first and foremost for our retirement. 

Make sure you consider all aspects of withdrawing for a first home, including how much you’d like to have when you retire, how much of it you need now for your first home, and how much you will keep contributing to it. 

If you’d like to have a chat about using your KiwiSaver for your first home, get in touch with our friendly mortgage team today.


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