The National Party pledged to expand New Zealand’s First Home Loan scheme by lifting the income cap to $300,000. Led by Christopher Luxon and housing spokesperson Chris Bishop, the policy aims to help middle-income earners purchase property with a 5% deposit rather than the standard 20% requirement.
The National Party announced that if re-elected, it will sweep away existing tiered income caps and establish a single threshold for the government-backed home loan program.
Overhauling Income Caps for the First Home Loan Scheme
Multiple buyers or single buyers with dependents face a cap of $150,000. National proposes to replace these distinct limits with a flat $300,000 income cap for any applicant pool, whether single or multiple borrowers.
The current thresholds have remained static since 2022, creating a gap where many full-time professional earners find themselves locked out of assistance while still unable to save a traditional deposit. Housing spokesperson Chris Bishop pointed to specific professional demographics excluded under current rules.
“Right now, a junior doctor on $100,000 can’t access the scheme. Nor can a young couple, like an electrician on $85,000 and a teacher on $78,000, or two friends who have just graduated from police college and are earning $77,000 each,”
Data cited shows the average gross income of first-home buyers sits at around $146,000. That economic reality means roughly half of all buyers currently exceed the existing multi-buyer cap even as they struggle against the cost of rent, food, and childcare.
Weighing Costs Against Long-Term Ownership Goals
The political backdrop involves a shifting landscape of government support. The current coalition government scrapped Labour’s First Home Grant in 2024, which provided eligible applicants up to $10,000 towards purchasing their first home. National defended that previous cut as a move away from blunt cash handouts in favor of targeted underwriting support that tackles the deposit barrier directly. Bishop said that giving people an amount of money in cash was a very blunt and ineffective way of actually helping.
The expanded First Home Loan scheme relies on loans issued by banks and other lenders, and underwritten by Kāinga Ora, allowing lenders to provide loans it otherwise would not. The party estimates widening access to the First Home Loan scheme would cost between $4 million and $6 million, funded from existing baselines.
That financial commitment sits alongside National’s broader vision of boosting New Zealand’s home ownership rate from about 66% currently back to its historical peak when about 74% of households owned their home, a milestone reached in the early 1990s. Administrative costs for the scheme cost $14.5m to administer during FY2024/25.
Market Momentum and Unresolved Questions
The policy announcement arrives as first-home buyers claim a commanding share of the property market. First-home buyers accounted for 29% of all property purchases in July, which Bishop described as the highest monthly share in more than 20 years.
Historical participation rates show that of 25,000 first home buyers last year, 4000 accessed the scheme. While National projects that lifting the cap will double the size of the scheme and bring thousands more applicants into the fold, officials have not released a precise target for total uptake.
Whether commercial lenders will scale up their participation to match the widened eligibility remains the central variable for the proposed expansion. With applications under the existing rules seeing more than 7,700 applications approved between 1 July 2025 and 30 April 2026, the incoming volume will test bank capacity if voters return National to power.
