Navigating Your Next Steps with First Home Partner: Is It Time to Buy Out Kāinga Ora?
A quick heads-up: The information in this article is designed as a general educational guide only and does not constitute personalised financial, tax, or legal advice. Because everyone's situation is unique (and bank policies change frequently), we recommend speaking with a licensed Financial Adviser to see how this applies to your specific circumstances. For full transparency on our terms of service, how we are remunerated by lenders, and any specific situations where a fee may apply, please read How We Get Paid.
Note before we start: This is not to do with the Kainga Ora First Home Loan Scheme - this is only in reference to the First Home Partner Scheme.
Up until 2023, the First Home Partner scheme provided an incredible stepping stone for thousands of New Zealanders. By stepping in to contribute up to 25% of the purchase price, Kāinga Ora helped bridge the deposit gap, allowing many hard-working people to finally hold the keys to their own home.
Now that we are a few years down the track—and with the programme having closed to new applicants—many homeowners are beginning to think about their next steps.
Having a silent partner on your property title can sometimes feel a bit daunting. You might be wondering how much it would cost to buy Kāinga Ora out, or whether it is even the right time to do so.
Let’s walk through how the buyout process actually works, how to check your current standing, and the different options available to you, so you can make the best choice for your family's future.
How the repayment actually works
The biggest misconception about shared equity schemes is how the final repayment is calculated.
See the maths in action
We built this interactive tool so you can test the numbers on your own situation. Adjust your property's value and see exactly how market growth alters the final buyout price—and whether you currently have enough equity to approach the bank.
Is it better to buy them out now, or wait?
Deciding when to buy out Kāinga Ora's share is a highly personal choice, and it relies heavily on what you believe the property market is going to do next.
Why you might want to buy them out now: If you feel that property prices in your area are going to rise over the coming years, it can be very strategic to buy out the government as soon as you can comfortably afford it. By taking 100% ownership now, you effectively lock in their buyout price. Any future capital gains or increases in value from renovations will then belong entirely to you, rather than being shared.
Why you might choose to wait: There is absolutely no rush if the timing does not feel right for your household. In fact, if the property market is currently softening or house prices in your area are dipping, waiting can actually be to your advantage. Because their share is a percentage, a dip in your home's overall value means the cost to buy Kāinga Ora out also decreases.
How the bank assesses your new mortgage
If you decide you would like to take full ownership, you do not need to use your own cash savings. Instead, the process involves a strategic refinance. You ask a bank to increase your current mortgage by enough to cover the Kāinga Ora buyout.
To approve this, the bank simply looks at two things:
- Your equity: They want to ensure your new, slightly larger loan is still a safe size compared to the total value of your home (ideally under 80% of the property's value).
- Your budget: They will review your current income and everyday expenses to ensure the new, slightly higher mortgage repayments will not put any undue financial stress on your household.
Do you have to pay for a valuation?
Because the buyout amount is based on today's market value, Kāinga Ora needs to know what your home is worth.
Many people worry they will have to pay for an expensive Registered Valuation right away. Thankfully, this isn't the case. When you begin the process, Kāinga Ora will order an automated desktop valuation through their own system, and they cover the cost of this entirely.
What if you just want to switch banks?
What if your current fixed-rate mortgage is coming to an end, your bank is offering you a poor interest rate, but you aren't quite ready to buy out Kāinga Ora just yet?
Finding out exactly where you stand
If you are unsure exactly what percentage of your home the government owns, or what they currently estimate your home to be worth, all of this information is readily available to you.
As a participant in the scheme, you can log into the Kāinga Ora portal. Inside, you will find:
- Your exact ownership percentage split.
- Kāinga Ora's current estimated valuation of your property.
- Your annual review documents and Goals Management Programme details.
You can access your details here: KO First Home Partner Portal.
We are here to help
Navigating shared equity schemes and dealing with banks can sometimes feel overwhelming, but you do not have to figure it out alone.
At Home Loan Factory, we take a gentle, pressure-free approach to your finances. Whether you want us to crunch the numbers to see if a buyout is possible, or you simply want to find a better interest rate while keeping Kāinga Ora on board, we are here to guide you through the process step-by-step.
Book a Free, No-Obligation Chat with a Home Loan Factory Adviser Today
