The National Party in New Zealand has announced a new election policy aimed at making it easier for first-home buyers to purchase property with a 5% deposit. If re-elected, National will increase the income cap for the government's First Home Loan scheme to $300,000. This $300,000 cap will apply to all applicants, including solo buyers, a significant change from the current criteria where individual buyers without dependents are capped at $95,000 and combined incomes or single buyers with dependents are capped at $150,000.
National Party leader Christopher Luxon and housing spokesperson Chris Bishop stated that the current income thresholds have not kept pace with wage growth and housing market conditions, leading to many working New Zealanders being excluded. Bishop highlighted that the average gross income for first-home buyers is approximately $146,000, meaning about half of them currently exceed the eligibility cap despite struggling to save for a 20% deposit. Since its inception in 2003, the scheme has assisted over 33,000 households, with more than 7,700 new applications approved between July 2025 and April 2026.
The policy's fiscal impact is estimated to be $4 million to $6 million, which is expected to be funded from existing baselines. This cost is significantly lower than previous years due to a Budget 2025 decision requiring borrowers to cover the full cost of Lenders Mortgage Insurance. While the scheme lowers the deposit hurdle, it does not alter the income servicing test; lenders will still assess applicants against stress-tested interest rates and responsible lending obligations.
