Planning to make a first-home KiwiSaver withdrawal in 2025?

Buying your first home is an exciting milestone, and KiwiSaver can be a great tool to get on the property ladder. 

But if you’re planning to use your KiwiSaver funds for your deposit, it’s important to understand how it works, what to consider, and how to avoid common pitfalls. Here’s what you need to know.  

Are you eligible to use KiwiSaver for your first home? 

The first key step is to check that you meet the eligibility criteria: 

  • You’ve been a member of KiwiSaver for at least three years.  
  • You’re buying your first home (or you qualify under Kāinga Ora’s “second chance” withdrawal criteria, e.g., you no longer own any interest/share in property, excluding ownership of Māori land). 
  • You’re buying a home to live in, not an investment property. 

If you’re eligible, you can access most of your KiwiSaver savings, including your contributions, your employer’s contributions and Government contributions. However, you need to leave at least $1,000 in your account. 

Is your KiwiSaver set up for your first-home withdrawal? 

If you plan to use KiwiSaver for a deposit within the next few years, it’s crucial to check whether your fund’s risk level aligns with your timeline – or ‘investment horizon’. Many people overlook this step, but it can make a big difference. 

From conservative to growth-focused options, KiwiSaver funds vary in their (potential) risk and (likely) return levels. Higher-risk options tend to deliver higher returns in the long term, but they may also fluctuate more in the short run.  

In other terms, if you’re looking at withdrawing soon, a higher-risk fund could expose your savings to more market volatility—potentially reducing your balance right when you need it most. So, you may want to consider reducing the risk level until you’ve bought your first home.  

That said, everyone’s situation is different. Before making any changes, talk to an Invest Link adviser. We can help you assess your current fund and adjust it to suit your needs and goals.  

Remember: KiwiSaver is for retirement, too 

Withdrawing from KiwiSaver to buy your first home means tapping into your retirement savings. While it can be a great way to get onto the property ladder, make sure you understand the impact on your long-term goals. 

Every dollar you withdraw is not just a dollar taken out of your future retirement fund. It’s a dollar that could have grown into much more over time through the power of compounding.  

Imagine rolling a small snowball down a hill. Each turn adds more snow, making it bigger and bigger as it gathers momentum. The same happens with your KiwiSaver savings: the longer they stay invested, the more returns you earn on your returns. 

By withdrawing money now, you’re effectively stopping that snowball mid-roll. That’s why it’s essential to weigh the benefits of buying a home against the long-term impact on your retirement goals.  

Of course, we’re not suggesting that it’s not a good idea to use your KiwiSaver towards your deposit for a first home, but give some thought about how you keep the savings habit up, while juggling your mortgage. Get in touch to learn more. 

What to do after your withdrawal 

So, you’ve decided to withdraw your KiwiSaver funds? To stay on track, it’s essential to review your KiwiSaver strategy after buying your home, both in terms of fund’s risk level and contribution amount.  

Your Invest Link adviser can help you with calculations – so you know where you’re at and what it may take to achieve your retirement goals.  

Don’t forget the bigger picture 

Buying your first home involves more than just KiwiSaver. At Invest Link, we work alongside our Insurance Link, Mortgage Link and F&G Link partners to support you through the entire process. Together, we can make your first-home journey as smooth as possible.  

Here’s how they can help you: 

Like to talk?  

Using KiwiSaver for your first home is a big decision, but with appropriate advice and planning, you can make it work for your immediate and long-term goals.  

Contact us today to speak with an Insurance Link adviser and take the first step towards homeownership.  Invest Link. We’re here to help.

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