National's Chris Bishop announces policy to extend income cap to $300,000 for Kāinga Ora low deposit First Home Loan Scheme, as party targets return to peak home ownership rates of around 74%

National is promising that if re-elected, it will widen access to low equity mortgages for first home buyers.

National housing spokesperson Chris Bishop says the party will widen access to 5 per cent deposits by extending the income cap under the First Home Loan scheme to $300,000 to all applicants. Currently the income cap for individual buyers with no dependents is $95,000, and for multiple buyers combined or individual buyers with dependents it's $150,000.  

The First Home Loan Scheme, administered by Kāinga Ora with participating banks and lenders, makes it easier for first home buyers to get into home ownership by only requiring a 5% rather than the standard 20%.

“First home buyers are dominating the housing market under the National-led Government. In July this year, first home buyers made up 29% of all purchases – the highest monthly share in more than 20 years," Bishop says.

But getting a deposit remains a major constraint on home ownership, he says, with most banks and lending providers requiring a minimum 20% deposit.

Since the scheme’s inception in 2003, over 33,000 households have been helped with getting into homeownership, and between July 1, 2025, and April 30, 2026, more than 7700 new First Home Loan applications have been approved, he said.

“However, the scheme’s current income caps are too restrictive and haven’t been updated since 2022. Single buyers with no dependents must earn $95,000 or less to be eligible, while multiple buyers combined or single buyers with dependents must earn $150,000 or less," says Bishop.

He says the average gross income of first home buyers is around $146,000 meaning around half of first home buyers earn more than that now.

 Kāinga Ora loans exempt from RBNZ's LVR restrictions

National's announcement comes at a time when banks' low equity home lending is surging. Kāinga Ora loans, including first home loans, are exempt from the Reserve Bank's high loan-to-value ratio restrictions.

In its policy document, National said while the scheme has proven effective, the income thresholds that determine eligibility have not kept pace with wage growth and current housing market conditions.

“National’s changes mean that all first home buyers earning up to $300,000 will be able to access the scheme, no matter whether they are single without dependents or a couple,” the document says.

Bishop says while a combined income of $150,000 might sound like a lot of money; "the reality is that plenty of young couples now earn more than that but still struggle to save for a 20% deposit while juggling the cost of rent, food, and childcare".

“National’s changes will address those pressures and build on the work we have done in government to support more people into home ownership.”

But the party’s policy document made clear that nobody would get a bigger mortgage than their bank said they can afford.

“The First Home Loan Scheme lowers the deposit hurdle, not the income servicing test. Lenders will still assess every applicant against stress-tested interest rates and their responsible lending obligations, and the lender ultimately makes the final decision.”

Bishop says National had a “vision of returning to peak home ownership rates of around 74%, up from 66% currently”.

National says fiscal impact of policy would be $4 million to $6 million

In terms of the fiscal impacts, National’s policy document says the First Home Loan Scheme costs approximately $14.5 million to administer during the 2024/25 financial year while supporting 3085 loan underwrites.

“This included the cost of Government subsidising the cost of Lenders Mortgage Insurance. The decision in Budget 2025 requiring borrowers to meet the full cost of Lenders Mortgage Insurance then substantially reduced the ongoing fiscal cost of the scheme."

“Allowing for a doubling in the size of the First Home Loan scheme, the fiscal impact of this policy would be $4-6 million, which is expected to be funded from existing baselines.”