Knowing the process early can save a lot of stress.
Using your KiwiSaver for your first home deposit is one of the most common ways first home buyers get across the line. But there’s a timing catch worth understanding before you sign anything.
The catch-22
To start a KiwiSaver withdrawal, you need a signed and dated agreement. But most agreements require a deposit (often 10% of the purchase price) within 10 working days of going unconditional. And a KiwiSaver withdrawal itself can take:
- Up to 10 working days if you’ve always lived and contributed in New Zealand
- Up to 15 working days if some contributions were made while you were living overseas
That gap can leave you short of the deadline, through no fault of your own.
Why this matters
If your deposit isn’t paid on time, the vendor can cancel the agreement (usually after giving three working days’ notice under a standard Auckland District Law Society (“ADLS”) agreement. At auction, the deposit is due immediately, so KiwiSaver alone won’t cover it on the day.
Further, the vendor cannot get early access to the deposit paid if the source of deposit is from your KiwiSaver. This can be a potential issue if the vendor needs some of your deposit to pay the deposit for their own newly purchase property.
How we help structure it
This is where your lawyer’s agreement wording and our deposit planning work together. In practice, we typically see:
- An initial deposit you can cover from any savings you have available (say $10,000-$30,000), paid when the agreement goes unconditional, so the vendor sees hurt money down from you straight away. It’s also not uncommon for $0 deposit to be accepted up front in some cases.
- The remainder of the 10% paid once your KiwiSaver funds land in your solicitor’s trust account, usually within a day of receipt. Remaining KiwiSaver funds are held in trust until settlement, so they’re protected if anything goes wrong (and can be returned to KiwiSaver without deductions if the deal falls over).
- Bank temporary overdraft: If an extra amount is needed to bridge any gaps between deposit available and total agreed deposit, the bank can often assist by providing a temporary facility.
Your lawyer will draft the special terms that make this work in your specific agreement, but we’ll help you work out realistic numbers for the initial deposit, confirm your KiwiSaver eligibility and timing upfront, and make sure the whole plan lines up with when you’ll actually have finance approved.
If you’re planning to use KiwiSaver for your deposit, talk to us before you make an offer. Getting the timing and numbers right from the start saves a lot of stress later.
Disclaimer: This content is general information only and is intended for educational purposes. HelloYello provides mortgage advice and does not provide KiwiSaver investment, legal, insurance, tax, or accounting advice.
