Mortgage requirements part 3: Leveraging your KiwiSaver savings

KiwiSaver is New Zealand’s savings initiative that combines your voluntary contributions with contributions from your employer and the government. It’s main purpose is to help you save for retirement, but in some cases it can also be used to help you fund the purchase of your first home.

Side note: If you’re not already a KiwiSaver member, we highly recommend joining ASAP – it takes the guesswork and discipline out of saving, and the money can rack up surprisingly quickly over the years.

How do KiwiSaver contributions work?

KiwiSaver contributions come from three sources:

• You: A proportion of your pay (3%, 4% or 8% as chosen by you) is deducted from your earnings and invested for you into a KiwiSaver scheme.
• Your employer: Contributes a minimum 3% of your gross salary.
• The government: Contributes 50 cents for every dollar you contribute annually up to $521.43. To max this out, you must contribute at least $1,042.86 per year.

How can I use my KiwiSaver savings to buy a house?

As noted, KiwiSaver is primarily centred around helping you save for retirement. However, you don’t necessarily have to wait until you’re grey and wrinkly to access your savings. If you meet certain requirements, you may be able to withdraw your KiwiSaver money to buy your first home.

You might be eligible if you:

• Are buying your first home
• Have been a KiwiSaver member for three or more years
• Are going to live in the property

It’s important to note that you must leave at least $1,000 in your KiwiSaver account. Check the official site for more details.

KiwiSaver is an excellent tool for getting your foot in the door and, when combined with New Zealand mortgage rate calculators, can help you strengthen your financial position when purchasing your first home.