Best home loan lenders in New Zealand for first-home buyers

For a salaried couple buying your first home in New Zealand with a deposit of around 10%, I'd focus on the lowest total borrowing cost, not simply the lowest advertised interest rate.

With a 10% deposit, you have a 90% loan-to-value ratio (LVR). This can limit your lender options, affect the interest rate you're offered, and potentially trigger a low-equity premium or margin. Some lenders also have special offers for eligible first-home buyers that can make a meaningful difference to your costs.

My recommendation is to compare the major banks against at least one alternative lender, and to get a mortgage adviser to help you negotiate. You don't need to be an expert in mortgages to get a competitive deal.

1. My recommended lenders to compare

I'd start with these four lenders, in this order of priority. The best deal will depend on your loan size, eligibility, the actual rate available at a 10% deposit, and any cash contribution.

1. BNZ — my first lender to investigate

Why I'd consider it: BNZ advertises a first-home buyer cash-back offer of at least $5,000 on eligible new home loans of $250,000 or more, even with a deposit as low as 5%. That makes it particularly worth investigating for your situation. BNZ's first-home buyer offer explains the eligibility conditions. bnz.co.nz

• Potential cost advantage: A substantial cash contribution can offset some of your initial home-buying expenses.
• What to check: BNZ says a low-equity premium applies when you have less than 20% equity. Its published premium schedule ranges from 0.35 to 1.20 percentage points a year for loans between 80% and 95% LVR, depending on the LVR band. At 90% LVR, the published premium is 0.75 percentage points. Confirm the premium applicable to your specific loan. bnz.co.nz
• Important catch: If you refinance or repay the loan within three years of receiving the cash contribution, some or all of it may need to be repaid.

My verdict: Put BNZ on your shortlist, but compare the actual interest rate and low-equity premium with those offered by competitors. A $5,000 cash contribution isn't automatically the cheapest deal.

2. ANZ — a strong alternative for a first-home buyer

Why I'd consider it: ANZ offers low-deposit lending options and advertises a $5,000 cash contribution for eligible first-home buyers taking out a new home loan of at least $200,000. The contribution is conditional on remaining with ANZ for at least three years. anz.co.nz, anz.co.nz

• Potential cost advantage: Its cash contribution could reduce the net cost of establishing your mortgage.
• What to check: ANZ's advertised special fixed rates generally require at least 20% equity, so you should ask for the rate and any additional margin applicable to a 10% deposit.
• Who it suits: Couples who want a mainstream bank, straightforward repayment arrangements and support throughout the application process.

My verdict: Get a written quote from ANZ alongside BNZ's. Compare the total cost over the period you expect to remain with the bank, rather than comparing the cash contributions alone.

3. Kiwibank — worth testing for a competitive deal

Why I'd consider it: Kiwibank is another major lender worth approaching, particularly if you're open to comparing its standard low-equity rates against the other banks.

Kiwibank confirms that it may lend with a 10% deposit in some circumstances. It also distinguishes between its special rates for borrowers with at least 20% equity and its standard rates for borrowers with less than 20% equity. kiwibank.co.nz, kiwibank.co.nz

• Potential cost advantage: It gives you another quote to use when comparing the rates and conditions offered by the larger banks.
• What to check: Ask specifically for its current rate for a 90% LVR owner-occupied mortgage, including any low-equity margin or premium.
• Who it suits: Borrowers who want to compare a different major-bank offer without necessarily changing their wider banking arrangements.

My verdict: Include Kiwibank in your comparison, but don't assume its advertised special rate will be available to you with a 10% deposit.

4. Westpac — another worthwhile competitor

Why I'd consider it: Westpac advertises a cash contribution of $5,000 or more on eligible new home loans of at least $250,000 for first-home buyers. It also offers low-deposit pathways, including eligible Kāinga Ora First Home Loans. westpac.co.nz, westpac.co.nz

• Potential cost advantage: Its cash contribution and negotiated interest rate could make it competitive with BNZ and ANZ.
• What to check: Westpac confirms that a low-equity margin may apply when you have less than 20% equity. Ask for a written quote showing the full cost at your deposit level. westpac.co.nz
• Who it suits: First-home buyers who want another major-bank quote to strengthen their comparison.

My verdict: Keep Westpac in the running, especially if it offers a lower effective cost after accounting for interest, fees and cash contributions.

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2. Which lender is likely to cost you the least?

I wouldn't declare one bank the cheapest for you without knowing your loan amount and the actual offers available at 90% LVR.

There is an important distinction between the lowest advertised rate and the lowest rate you can actually obtain.

For example, a lender might advertise a rate of 4.9% for borrowers with at least 20% equity but charge a low-equity premium to someone with a 10% deposit. Another lender might have a higher headline rate but offer more favourable pricing for low-deposit borrowers.

The Reserve Bank of New Zealand's published mortgage-rate data also notes that advertised special rates are conditional and aren't necessarily available to every borrower. rbnz.govt.nz

What I'd compare

Cost or feature	Why it matters
Actual interest rate	Determines how much interest you pay on the outstanding balance.
Low-equity premium	Can materially increase your borrowing cost with a 10% deposit.
Cash contribution	Reduces your initial costs, subject to eligibility and repayment conditions.
Application and account fees	Add to the cost of establishing and maintaining the loan.
Fixed-rate break fees	Could be significant if you sell, refinance or restructure during a fixed term.
Extra repayment options	Can help you pay off the mortgage faster and reduce interest.
Loan flexibility	Matters if your income rises, you receive bonuses or you want to make lump-sum payments.

A simple example of why the interest rate matters

Suppose you borrow $720,000 over 30 years and compare two hypothetical interest rates: 5.00% and 5.25%.

Assuming principal-and-interest repayments and that each rate remains unchanged for the full 30 years:

	At 5.00%	At 5.25%
Approximate monthly repayment	$3,865	$3,976
Approximate total interest over 30 years	$671,000	$711,000

The 0.25-percentage-point difference would mean roughly $111 more per month and $40,000 more in interest over 30 years.

These are illustrative calculations, not current lender quotes. Actual costs will depend on future interest rates, your repayment choices and your loan structure.

The lesson is that a cash contribution is useful, but a persistently higher interest rate can outweigh it.

3. One alternative worth investigating: The Co-operative Bank

I'd also obtain a quote from The Co-operative Bank.

It advertises dedicated first-home buyer rates and a 1% cashback offer, but its published standard first-home buyer special rates generally require a 20% deposit. Different eligibility conditions apply to Kāinga Ora First Home Loans. Therefore, don't assume the advertised rates or cashback will be available with your 10% deposit. Ask for a quote based on your actual circumstances. The Co-operative Bank

I'd prioritise this lender if it can offer you competitive low-deposit terms, rather than choosing it simply because its advertised offer looks attractive.

4. How I'd minimise your total mortgage cost

The lender matters, but how you structure and repay the mortgage can make a substantial difference too.

A. Get the low-equity premium clarified first

With a 10% deposit, you'll typically borrow 90% of the property's value.

Lenders may charge an additional interest margin because your deposit is below 20%. This is separate from the advertised interest rate and can make an apparently cheap mortgage more expensive.

Ask every lender:

• What interest rate would you actually offer us with a 10% deposit?
• Is there a low-equity margin or premium?
• How much does that add to our repayments?
• When could we qualify to have it removed?
• Would our rate improve if our deposit were slightly larger?

The last question is particularly important. If you're close to the next LVR threshold, a little more deposit could potentially reduce your borrowing costs.

B. Negotiate the cash contribution

Ask BNZ, ANZ and Westpac for their best offers, then use the strongest eligible offer when negotiating with the others.

Don't just ask which bank has the lowest rate. Ask each lender to provide its best overall package, including:

• The interest rate and any low-equity premium.
• The cash contribution.
• Any establishment or account fees.
• The conditions attached to the cash contribution.

Remember that cash contributions often come with a commitment to stay with the bank for a specified period. Leaving early can mean repaying some or all of the contribution.

C. Choose your fixed-rate term carefully

A fixed interest rate gives you certainty over your repayments for the chosen period. A floating rate offers more flexibility but is generally more expensive.

For first-home buyers who want to keep costs low, I'd compare one-year and two-year fixed rates as a starting point.

However, don't automatically choose the shortest term. You'll need to refinance at the end of the fixed period, and the next rate could be higher.

You could also split your mortgage into two fixed-rate portions with different expiry dates. This spreads your refixing risk, although it doesn't guarantee the lowest total cost.

D. Make extra repayments when you can

If your budget allows, paying more than the minimum repayment can reduce your outstanding principal and the interest you'll pay over the life of your mortgage.

For example, you could increase your regular repayments when your salaries rise.

Check the loan conditions first: fixed-rate mortgages can limit extra repayments or charge break costs if you repay too much early. Some lenders offer structures that allow a degree of flexibility.

E. Compare the cost of using a mortgage adviser

Given your limited mortgage experience, I'd strongly consider using an independent mortgage adviser who can compare several lenders.

The Financial Markets Authority explains that advisers can help you compare loan structures, interest rates, fees and features. It also recommends asking how the adviser is paid and whether their recommendations cover multiple lenders. FMA mortgage advice guide

Ask the adviser to show you the numbers in writing, including their fees, any lender commission and any conditions attached to the recommended loan.

5. My practical recommendation

If I were approaching this with your priorities, I'd take the following steps:

1. Start with BNZ and ANZ. Both advertise cash contributions for eligible first-home buyers, including borrowers who qualify for low-deposit lending.
2. Get competing quotes from Kiwibank and Westpac. Ask each for the best rate available at 90% LVR.
3. Request a fifth quote from The Co-operative Bank to see whether its low-deposit options are competitive.
4. Compare the total cost, not just the interest rate or cashback. Make sure every quote uses the same loan amount and repayment term.
5. Have a mortgage adviser review the offers before you commit, especially if you're unsure how fixed rates and low-equity premiums work.

My initial shortlist would be BNZ, ANZ and Kiwibank, with Westpac as a close competitor. That's a shortlist for obtaining quotes, not a claim that these lenders will necessarily offer you the cheapest mortgage.

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6. Let me narrow this down to the cheapest options for you

I can make the recommendations much more useful if I know one important detail:

Roughly how much do you expect to borrow for your first home?

For example, NZ$400,000, NZ$600,000, NZ$800,000 or another amount.

The loan size affects how valuable cashback offers are relative to interest rates and fees. With that figure, I can help you compare the lenders more meaningfully and identify which offers are worth investigating first.