Buying your first home is exciting, but understanding how mortgages in NZ work can feel overwhelming. This guide will break it down step by step—so you’ll know what a mortgage is, how much you can borrow, the different loan types available, and what to expect in the process.
Whether you’re just starting to save for a deposit or getting ready to apply, this simple guide will help you feel more confident as a first-home buyer.
What Are Mortgages in NZ?
A mortgage is a loan from a bank or lender that helps you buy a home. The property itself acts as security for the loan. You borrow an agreed amount, then pay it back in regular instalments (usually monthly) over a set term, which can be up to 30 years.
Each repayment includes:
- Principal – the money you’ve borrowed
- Interest – the cost of borrowing the money
The amount you can borrow and the interest rate you’re offered depend on your financial situation and the lender’s criteria.
How Much Can You Borrow?
One of the first questions most buyers ask is: “How much can I borrow for a mortgage?”
Your borrowing power depends on several factors, including:
- Your income
- Current debts (like credit cards or car loans)
- The size of your deposit
- Your credit history
For a detailed breakdown, check out our full guide on how much you can borrow for a mortgage
Types of Mortgages in NZ
When taking out a mortgage in New Zealand, you’ll usually come across a few main types of loans:
- Fixed-rate mortgage – Your interest rate is locked in for a set period (e.g., 1–5 years). This gives you certainty over repayments but less flexibility.
- Floating (or variable) rate mortgage – Your interest rate can go up or down in line with market changes. This allows extra repayments without penalties but can make budgeting trickier.
- Revolving credit mortgage – Works like a giant overdraft. Your income is paid into the account, and you only pay interest on the outstanding balance. Great for disciplined money managers.
- Offset mortgage – Links your mortgage to your savings and everyday accounts. The money in those accounts reduces the balance you pay interest on, saving you money long-term.
You can also have a home loan that includes a mixture of these types of mortgages. Talking to a mortgage broker about your goals and financial habits will determine what the best mix is for you.
The Mortgage Process
Here’s what the typical mortgage journey looks like in New Zealand:
- Save your deposit – Usually at least 20%, though some lenders will consider less.
- Get pre-approval – A conditional approval from a lender showing how much you can borrow.
- Find a property – Start house hunting within your approved price range.
- Final approval – Once you’ve found a home, the bank confirms your loan.
- Settlement – The loan is advanced, and you take ownership of the property.
If you’re self-employed, the process can be a little different, as lenders assess income in other ways. Our self-employed mortgage page explains how to prepare and improve your chances of approval.
Tips for First-Home Buyers Applying for Mortgages in NZ
Buying your first home can be smoother if you plan carefully. Here are some practical tips:
KiwiSaver – If you’re a member, you may be able to withdraw some of your savings for your deposit.
Family Support – A gift or loan from family can boost your deposit and help you borrow more.
Reduce Debt – Pay down credit cards and personal loans where possible. Providing 3–6 months of statements with no missed payments can show lenders you’re reliable. Closing unused credit cards also helps, as lenders consider your available credit limits when assessing borrowing power.
Work with a Broker – Mortgage brokers know the lending market and can help present your situation to get the best possible borrowing outcome.
For any questions or next steps, you can also visit our first-home contact page to get in touch directly.
Ready to Take the Next Step?
Find out exactly what you could borrow and what options are available for you:
Book a chat with us today to discuss your situation.
Or contact us if you’d like to ask a few questions first.