Using KiwiSaver for your first home? Here’s what to think about beyond the withdrawal, from fund choice and mortgage structure to insurance, wills and budgeting.
Congratulations, You're Becoming a Homeowner
Buying your first home is a big deal. After months of open homes, nervous calls to the bank and consultations with your mortgage broker, there’s no feeling quite like closing the deal and getting your hands on the keys to your new home.
For most first home buyers, nearly all the energy goes into two things: pulling your deposit together and getting your KiwiSaver withdrawal over the line. After all, without that down payment there’s no house.
Here’s the thing many new homeowners only realise later: the withdrawal is just one step in a much bigger financial journey. Whether you’re saving for your first home, or someone close to you is, there are a few important things worth thinking about.
Understanding the KiwiSaver Withdrawal Process
You probably already have a pretty good idea of the eligibility and application requirements. In short, you generally need to have been a KiwiSaver member for at least three years, be buying a home to live in (not a rental), and not have owned property before. If you have owned before, you may still qualify through Kāinga Ora as someone in the same financial position as a first home buyer. You’ll also need to leave at least $1,000 in your account.
In practice, your solicitor is a vital part of the process. They’ll usually help with the application, and your KiwiSaver funds are often paid directly into their trust account ahead of settlement. Timing matters, because providers need time to process requests, so it pays to apply well before your deadline.
If you’re currently looking into starting the withdrawal process, our team of KiwiSaver advisers can help. Want to know more about the process? These are good places to start:
Before Settlement: Is Your KiwiSaver in the Right Fund?
If you’re relying on KiwiSaver for your deposit, the fund your money sits in matters more and more as settlement gets closer.
Working with an adviser can help you choose the best fund to fit your goals. When Amy came to enable.me, she was planning to use her KiwiSaver investment for a first home purchase. At the time her savings were in a growth-focused fund.
Growth funds can be a great fit when your goal is years away. They have more time to ride out the ups and downs of the market. But when you know you’ll need a set amount of money on a set date, a sharp dip at the wrong moment can be a massive setback.
After talking her options through with an adviser, Amy moved to a more conservative fund, before finally shifting into a cash fund as she got closer to withdrawal. This provided her with more certainty. She knew the portion she’d set aside for her deposit would significantly reduce exposure to short-term market movements, providing relief from unnecessary stress during an already stressful process.
This approach won’t be right for everyone. Your personal circumstances, including how much you’re withdrawing, when you expect to buy, and what’s left in your account, all factor into choosing the right fund. If your plans change or your purchase takes longer than expected, switching funds can mean missing out on growth. That’s why it’s worth getting advice ahead of making any changes.
Your Mortgage Structure Matters More Than You Think
When you’re buying your first home, it’s easy to zero in on getting the mortgage approved. Your focus might be narrowed down to getting the ‘yes’ so you can sign the deed and make the move.
The thing is, how your mortgage is set up can make a real difference over the life of the loan. Will you fix or float? Should you fix all of it, or split it across a revolving credit or offset account? There’s no single right answer, but knowing the mortgage options and repayment strategies available to you can help save you money from the outset.
This is where a mortgage adviser can help you weigh up your options. They can help you look beyond simply drawing down the loan, so that you can set up a mortgage structure that fits your circumstances. Our Master Your Mortgage coaches specialise in helping clients build a plan to get mortgage-free faster, potentially saving thousands in interest.
Insurance: More Than Just a Bank Requirement
Another consideration to get on top of is your home and contents insurance. Your lender will usually require you have house insurance in place before settlement. Often first home buyers will find that sorting insurance becomes another box to tick in the rush to the finish. Planning ahead means you can be sure you’re fully covered, and that your settings are fit for purpose.
Your first mortgage is also a good trigger to take a look at your personal insurance. Home and contents insurance protects your property, but what’s protecting your ability to keep paying for it?
When life is going to plan, it’s easy to overlook the unexpected changes that can occur at any moment. It’s important to take a moment to ask yourself the hard questions. Do you know how you would cover your repayments if you couldn’t work for six months because of illness or injury? If you were diagnosed with a serious illness, would you have space to focus on recovery? And if the worst happened, would the people left behind be covered, and able to stay in the home?
Life, trauma and income protection insurance are designed for exactly these situations. Not everyone needs every type of cover, and the right mix depends on your circumstances. Our insurance advisers can help you work out what makes sense for you, and we can also provide easy access to AMP general insurance referrals.
Don't Forget Your Will
It’s all too common for people in New Zealand to skip creating a will. It can feel like something for later in life, that you might not want to think about yet.
The reality is, buying a home is one of the biggest financial purchases you’ll ever go through. Your home may now be your largest asset. How you own it, whether jointly or as tenants in common, affects what happens to it if you die. If you’re buying with a partner, friend or family member, or if parents have helped with the deposit, it’s worth making sure everyone is clear on what happens next.
This makes taking out a mortgage a natural time to create or update your will. Your lawyer is already involved in your purchase, so it’s worth taking the time to seek legal advice for your will and wider estate planning.
After Settlement: Setting Yourself Up for Success
Moving in is an incredible feeling, and it’s easy to get swept up in the excitement of finally owning your own home. Once the boxes are unpacked and the housewarming is over, the reality of home ownership can be a shock to the system: regular mortgage repayments and a list of costs that renters don’t always see coming.
Rates, insurance premiums, maintenance and the occasional emergency repair all need a place in your budget. You can stop a small problem from becoming a stressful one by budgeting ahead and building a buffer for these costs early on.
Don’t forget to also check in on your KiwiSaver savings after the withdrawal. If you moved to a more conservative fund before buying, it may be time to review whether your fund still fits or whether it needs to be shifted. It’s important to make sure you have the best set up for your financial goals.
This is where financial coaching can make a real difference. An enable.me coach can help you build a budget that works with your new commitments, create good money habits from day one, and keep you moving toward your next goal, whether that’s paying the mortgage down faster or building savings again.
Home Ownership Is Just the Beginning
Your KiwiSaver withdrawal helps unlock the front door, but the decisions you make before and after settlement can have a much bigger impact in the long run.
So, while you’re celebrating this incredible milestone (as you should), take a moment to step back and look at the bigger picture. Are all the pieces of your financial plan working together? Tailoring your KiwiSaver fund, mortgage structure, insurance and will to your personal circumstances can help set you up for success from the get-go.
Speak to your adviser about your first-home plans and whether your KiwiSaver, mortgage structure, insurance arrangements and financial plan are working together to support your goals.
General information only
The information in this article is general in nature and is not intended to be personalised financial advice. It does not take into account your individual circumstances, objectives or financial situation. Before making any financial decisions, including decisions about borrowing or using credit, you should consider whether the information is appropriate for you and seek advice from a qualified financial adviser. While we take care to ensure the information is accurate at the time of publishing, we accept no responsibility for any loss arising from reliance on it.
