Update to 5% Deposits

Friday, May 20th, 2022

The Government announced the new budget yesterday and with it came some exciting changes for first home buyers!

They have removed the house price caps for the First Home Loan scheme. This means that you can buy a house at any price with a minimum of a 5% deposit through the scheme.

Previously, the house price caps hadn’t been updated since March last year and even then not all regions were updated. This has been causing a lot of frustration for first home buyers who have only been able to get help to buy houses at the lowest end of the market.

There are still income caps, meaning that you can’t earn more than $95,000 as a single buyer and jointly $150,000 for multiple buyers. However, they have added that if you are a single buyer with at least one dependent, your income cap is now $150,000.

Removing house price caps is a massive game changer in the first home buyer market. For people who previously had the income but didn’t have a 20% deposit, this will enable them to buy now and not have to wait.

For example, a couple we have been working with jointly earn $120,000 a year. However, they only have $35,000 in cash savings (including their KiwiSaver). To buy a $650,000 house in Christchurch they would’ve had to have $130,000 for their 20% deposit. This is because the house price cap for an existing home in Christchurch was $500,000. But thanks to the new changes, they can buy now with their current savings and a 5% deposit!

Please reach out if you’d like to have a chat about your personal situation or if you have any questions – we would really love to help you get into your own home.


This article is for general information only and should not be taken as advise.  Please see our experts page to contact your Adviser for personalised advice.

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