A Guide for First Home Buyers: Securing the Best Mortgage

If you’re planning to buy a home in Hamilton or anywhere in the Waikato region, one of the first questions you’ll ask is: How much can I borrow for a mortgage? It’s a big decision, and the answer depends on a few key things — your income, your expenses, your deposit, and even your credit score.

What Affects How Much You Can Borrow for a Mortgage?

Income, Expenses, and Credit Score

Your income is the starting point. Lenders want to know how much you earn — and how stable that income is. If you’re employed full-time, that’s fairly straightforward. If you’re self-employed or your income varies, they’ll look more closely at your financial history to understand your earning patterns.

But income is only part of the picture. Your existing debts also play a big role. Credit cards, car loans, and other personal loans can all affect how much you’re able to borrow. Lenders consider your total financial commitments to make sure you can comfortably manage a mortgage on top of them. Keeping your debt under control shows you can handle repayments responsibly, which strengthens your application.

Deposit Size and LVR (Loan-to-Value Ratio)

Your deposit is the amount of money you put toward the purchase upfront. In New Zealand, most lenders prefer a deposit of at least 20%. But there are options for lower deposits — especially for first-home buyers. You may be able to get a loan with a deposit from as little as 5%.

How Do Banks and Brokers Assess How Much You Can Borrow for a Mortgage?

Bank Assessments

When you apply directly with a bank, they’ll use their own calculator to work out how much you could borrow. They look at:

Income – not just how much you earn, but how stable it is (salary, self-employed income, or contract work).
Expenses – your everyday living costs such as food, transport, insurance, and utilities.
Debts – things like credit cards, car loans, personal loans, Afterpay, or store finance. Even small limits on unused credit cards are counted.
Deposit – how much you’ve saved or built up through KiwiSaver or other sources.

On top of that, banks apply a test (or “stress”) interest rate, which is higher than the current rate. This is to check whether you could still afford repayments if interest rates rise in the future.

Broker Assessments

Mortgage brokers, like Andre Stokes here in Hamilton, take a wider view. Instead of relying on just one bank’s criteria, brokers work with multiple lenders — each with their own calculators and lending rules. This means:

You’ll often have a better chance of approval if one bank says “no.”
You can compare borrowing amounts across lenders.
You’re more likely to find a solution that fits your income, debt, and goals.

Brokers also help you present your application in the best light — especially if you’re self-employed, have variable income, or already have existing debts.

Borrow for a Mortgage in Waikato: What’s Typical?

Waikato Property Prices

Property values across the Waikato Region can vary considerably, depending on the location:

Hamilton City: The average house price as of June 2025 is approximately NZ$788,171, according to CoreLogic data compiled by Opes Partners.
Waikato Region Overall: Median prices hover around NZ$735,000 as of June 2025, having surged from about NZ$340,000 a decade earlier.
Te Kūiti (Waitomo District): This remains one of the most affordable areas in the region. The average house value stands at NZ$392,550,

This underscores a substantial price range—from Te Kūiti’s mid-$300k to Hamilton’s upper-$700k—highlighting how location plays a pivotal role in affordability for buyers.

First-Home Buyers in Waikato

If you’re taking your first steps onto the property ladder, you may have access to several helpful schemes:

1. KiwiSaver First-Home Withdrawal

After contributing to KiwiSaver (or a complying super fund) for at least three years, you may be able to withdraw most of your savings—including member contributions, employer contributions, government contributions, and investment earnings—to help with your first home purchase.

You must leave a minimum of NZ$1,000 in your KiwiSaver account, and not all funds are withdrawable (e.g., Australian super transfers and certain government kick-start amounts may be excluded).

Withdrawals are restricted to a property you intend to live in—this cannot be used to purchase investment properties.
Check out the IRD website for more information

2. Kāinga Ora First-Home Loan

With this option, you can secure a home loan with a deposit as low as 5%, thanks to Kāinga Ora underwriting the remainder of the deposit risk for participating lenders.
Kāinga Ora – Homes and Communities

Eligibility criteria include being a first-home buyer (or a previous owner in a similar financial place as a first-home buyer), meeting maximum income thresholds (e.g., <$95,000 for individuals without dependants or <$150,000 combined for co-buyers), and purchasing a home you intend to live in.

The loan includes a 1.2% Lender’s Mortgage Insurance (LMI) premium, payable upfront or added to the loan balance.

Tips to Increase How Much You Can Borrow for a Mortgage

Reduce Your Debt
Banks look closely at your existing debt, such as credit cards, personal loans, and car finance. Paying these down (or closing unused credit facilities) lowers your monthly commitments, which can free up more borrowing power.
Increase Your Deposit
The bigger your deposit, the less risk the lender takes on. This can not only increase how much you’re able to borrow but may also give you access to better interest rates and more lenders.
Improve Your Credit Score
Your credit history shows lenders how reliable you are with money. Paying bills on time, avoiding missed payments, and keeping debt levels manageable can strengthen your application and make banks more willing to lend.
Use a Broker
Mortgage brokers have access to a wide range of lenders and know the different borrowing criteria. They can help present your situation in the best possible way and find a lender who’s more likely to offer you the maximum amount.

Contact Andre for a Personalised Borrowing Assessment

Every buyer is different. Your income, deposit, and goals all affect how much you can borrow for a mortgage. Andre Stokes is a local mortgage broker based in Hamilton. He knows the Waikato market and works with a range of lenders.

Ready to find out how much you can borrow? Contact Andre today for a free, personalised borrowing assessment.

Buying your first home is an exciting milestone, but it can also be overwhelming, especially for first home buyers trying to secure the best mortgage rates. With so many factors to consider, where do you start? In this guide, we’ll walk you through the essential steps to find the best mortgage rates in New Zealand and make the home-buying process as smooth as possible for first home buyers.

First Home Buyers: Understand Your Financial Situation

Before you start hunting for a home, it’s crucial to get a clear picture of your finances. This includes understanding your income, expenses, and how much you can afford to borrow.

Check Your Credit Record

Your credit record plays a significant role in determining the interest rate you’ll be offered. Lenders use your credit record to gauge your reliability as a borrower. Check your credit record for any errors and work on improving it if needed.

Calculate Your Budget

Determine how much you can comfortably afford to spend on a home. Use online calculators to estimate your monthly mortgage payments based on different loan amounts and interest rates. Don’t forget to factor in additional costs like property taxes, insurance, and maintenance.

First Home Buyers – Get Mortgage Pre-Approval

Getting pre-approved for a mortgage is a crucial step in the home-buying process. It gives you a clear idea of how much you can borrow and shows sellers that you’re a serious buyer.

Gather Your Documents

To get pre-approved, you’ll need to provide documentation such as your income statements, bank statements, and details of your assets and liabilities. Having these documents ready will speed up the process.

Work with a Mortgage Broker

A broker can access a wide range of lenders and mortgage products, helping you find the best rates and terms that suit your needs. They do the legwork for you, comparing different options and negotiating on your behalf, ensuring you get the most competitive deal available. Contact me now

Compare Mortgage Rates

Once you have a clear understanding of your finances and have been pre-approved, it’s time to compare mortgage rates. Here’s what to look for:

Fixed vs. Variable Rates

Decide between a fixed-rate mortgage and a variable-rate mortgage. Fixed-rate mortgages offer stability with consistent payments throughout the loan term. Variable-rate mortgages can fluctuate with market conditions, which means your payments might change, but you could benefit from lower rates if the market improves.

Consider Loan Terms

The term of your loan affects your monthly payments and the total amount of interest you’ll pay. Shorter-term loans generally have higher monthly payments but lower overall interest costs. Longer-term loans have lower monthly payments but can result in higher total interest.

Look for Additional Costs and Fees

Beyond the interest rate, be aware of any additional costs and fees associated with your mortgage. These can include:

Application Fees

Some lenders charge an application fee for processing your mortgage application. Make sure you’re aware of any fees upfront.

Break Fees

If you decide to pay off your mortgage early or refinance before the end of a fixed-rate term, you may incur break fees. Understand these fees and factor them into your decision.

Lender’s Mortgage Insurance (LMI)

If your deposit is less than 20% of the property’s value, you might need to pay Lender’s Mortgage Insurance. This protects the lender if you default on your loan and can add to your overall costs.

Understand the Home Loan Process for First Home Buyers

Understanding the home loan process will help you feel more confident and prepared. Here’s a quick overview of what to expect:

Application

Submit your mortgage application along with the required documentation. The lender will review your application and assess your financial situation.

Approval

Once approved, you’ll receive a mortgage offer outlining the terms and conditions. Review this carefully and make sure you understand all aspects of the loan.

Settlement

After you accept the offer, the settlement process begins. This involves finalising the loan and transferring funds to complete the purchase of your home. Your lawyer or conveyancer will typically handle this part of the process.

Stay Informed and Flexible

The mortgage market can change, so it’s important to stay informed about interest rate trends and any changes in lending criteria. If you find a better deal in the future, you might consider refinancing your mortgage to take advantage of lower rates or improved terms.

Ready to start your journey to homeownership? Contact us today for personalised advice and find out how we can help you secure the best mortgage rates! 📞

Final Thoughts

Securing the best mortgage rates as a first-time homebuyer involves understanding your financial situation, shopping around for lenders, comparing rates, and being aware of additional costs. By following these tips and seeking professional advice, you can navigate the mortgage process with confidence and find the best deal for your new home.

Feel free to reach out if you have any questions or need assistance with your mortgage application. We’re here to help you make your dream of homeownership a reality!