The 5% deposit First Home Loan, and what each party would change
The deposit is what stops most people buying a first home. One scheme cuts it from 20% to 5%, and the parties disagree on whether widening it helps.
How the First Home Loan works
Banks normally want a 20% deposit. The First Home Loan lets an eligible buyer purchase with 5%, and the Crown carries the extra risk the bank would otherwise refuse.
It is not a grant and it is not cheaper money. You still borrow from a lender and pay it all back. What changes is how much you need saved before you can start.
There is an income limit. Today it is $95,000 for a single buyer and $150,000 for two or more buyers combined.
What National would change
National announced on 6 September that it would replace both limits with a single $300,000 cap for everyone. It says that would roughly double the number of buyers using the 5% deposit scheme, at a cost of $4 million to $6 million a year.
National would lift the First Home Loan income cap from $95,000 (single) or $150,000 (combined) to $300,000 for all buyers.
RNZ: National to widen the First Home Loan schemeThe case for and against
For: many people can afford the repayments on a home but cannot save a 20% deposit while paying rent. Lowering the deposit gets them in years earlier, and the cost to the taxpayer is small.
Against: helping more people borrow does not build a single extra house. If supply stays the same, more buyers with more borrowing power can push prices up, which helps sellers more than buyers. A buyer with a 5% deposit also owes more than the home is worth sooner if prices fall.
Home ownership is at its lowest rate since 1951, about 65% of households, down from a 74% peak in the 1990s.
Stats NZ: Home ownership rateWhere the other parties stand
NZ First supports the Crown co-investing with first-home buyers to get them into ownership, but has taken no position on the $300,000 cap.
Labour widened the scheme's limits when it was in government in 2022 and has not opposed this change. Its 2026 housing focus is building more social housing.
ACT argues that support for buyers does not fix a shortage of houses, and campaigned to scrap First Home Grants.
The Greens build their housing policy on public homes, rent caps and a rental warrant of fitness, and have not backed the change.
Te Pāti Māori has published no position on it. Its housing policy centres on public housing and building on Māori and ancestral land.
Where this sits in the bigger picture
The real split is between helping people buy and building more homes to buy. Most parties want some of both and differ on the balance.
The NZVoteCheck quiz has seven questions on housing and renting, including this one. You can also compare every party's housing policy side by side, or start from the home page.
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