Watch: National pledges to make it easier for first home buyers to get 5% deposits
The National Party is promising to increase first home buyers’ access to low-deposit mortgages if elected, which it says will help more buyers into their first homes.
Announcing the policy this morning, leader Christopher Luxon and housing spokesman Chris Bishop said the policy would help National achieve its goal of increasing home ownership rates back to their historical peak when about 74% of households owned their home.
That milestone was reached in the early 1990s.
The home ownership rate has fallen to about 66% today, although the recent housing crash has seen large numbers of first home buyers’ snap up their first homes.
Bishop said National will widen access to 5% deposits by extending the income cap under an existing First Home Loan Scheme to $300,000.
The Government has run the ‘In Reach’ loan scheme since 2003. Rebadged as First Home Loan scheme in 2019, it is currently administered through Kāinga Ora.
Currently, it has an income cap of $95,000 for an individual buyer with no dependents or $150,000 for a loan to multiple buyers or a single buyer with dependents.
National says that lifting the cap to $300,000 reflects the fact that incomes have grown and many young professionals with high earnings are still unable to save for a deposit.
“The scheme’s current income caps are too restrictive and haven’t been updated since 2022,” Bishop said.
“So, right now, a junior doctor on $100,000 can’t access the scheme. Nor can a young couple, like an electrician on $85,000 and a teacher on $78,000, or two friends who have just graduated from police college and are earning $77,000 each.
“The average gross income of first home buyers is around $146,000. That means around half of first home buyers earn over $146,000 now.
“So, while a combined income of $150,000 might sound like a lot of money, the reality is that plenty of young couples now earn more than that but still struggle to save for a 20 per cent deposit while juggling the cost of rent, food, and childcare.
“National’s changes will address those pressures and build on the work we have done in Government to support more people into home ownership,” Bishop said.
National promised to abolish the distinction between single and multiple buyers, creating a single income cap of $300,000 regardless of how many borrowers there are.
The scheme has so far helped over 33,000 households into home ownership and between 1 July 2025 and 30 April 2026 more than 7,700 applications were approved.
National thinks this policy will double the size of the scheme, costing the Crown $4-6 million extra a year — a cost that will be met from existing baselines.
Bishop defended the supply side reforms championed by this Government — much of which was substantially introduced under the last Labour Government.
“Our Government’s reforms have accelerated this success by enabling greater housing supply. We want to continue the momentum, with a vision of returning to peak home ownership rates of around 74 per cent, up from 66 per cent currently.
“National’s Backing First Home Buyers policy will support that vision, alongside a suite of other policies to help Kiwis get ahead. That includes introducing no new taxes, boosting KiwiSaver, extending paid parental leave, implementing a rates cap, and lowering the student loan repayment rate.
“National is sending a clear signal to ambitious young Kiwis that we back them to stay in New Zealand and get into a home of their own. It’s all part of our wider plan to fix the basics and build the future,” Bishop said.
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