Homeownership, Personal Finance

How to Buy a $650,000 House in NZ

Trade Me Property Search

Hello friends,

Today I will be answering a big question: how might two people earning an average salary buy an average priced property in New Zealand?

Writing this out of curiosity and to inspire & inform, I need to make a few disclaimers. The first is that I will be making assumptions. The second is that I will be over-estimating and simplifying numbers & figures. Banks and financial entities have this disclaimer when presenting their calculators – and creating hypothetical scenarios here is no different because it’s not realistic to personalise this to everyone’s individual situation.

In saying that, I’ve chosen what I believe to be realistic – of the average millennial earning average dollars buying an average house – based on my experience, my knowledge of others’ experiences and good ol’ fashioned research!

I hope this helps to give you an idea of how two people in New Zealand might buy what is officially called an ‘affordable home’ in New Zealand, at the humble price of $650,000.

Let’s call them Jessica and Noah!

Hypothetical scenario time.

Jessica and Noah, 26 and 31, earn the NZ median salary. With search results differing from $41,200 to $48,800 to $58,300, let’s go with $50,000.


They contribute 4% to Kiwisaver – the middle option in between 3% and 8% – so every fortnight, they bring home $1510.97 individually or $3022 altogether.

They each have $30,000 in their Kiwisavers as they have both worked part-time since they were teenagers and full-time for the last six years.

(This one is an educated guess based on what my Kiwisaver would be if I hadn’t used my First Home Withdrawal and continued working full-time + on my partner’s untouched Kiwisaver given that we have similar work histories)

$30,000 in Kiwisaver x 2 people = $60,000

Their joint expenses are an overestimated $1500, which leaves them with $1522 as disposable income every fortnight. They save $1000 of this every fortnight.

Expenses: $1500

Rent (1 bedroom Auckland CBD) – $800

Food – $300

Utilities (Power, Water, Internet) – $200

Miscellaneous Expenses / Buffer – $200

Jessica & Noah are looking at buying an affordable home, which in NZ is $650,000 or under. Perhaps they’ve won a ballot from KiwiBuild? Or perhaps they simply searched Trade Me for houses, townhouses & units under $650,000, which at the moment yields 1518 results for Auckland.

Here’s a look at Jessica & Noah’s situation so far:

Joint salary (gross) – $100,000

Joint fortnightly income – $3022

Joint fortnightly expenses – $1500

Joint fortnightly savings – $1000

Joint Kiwisavers – $60,000

So, how might Jessica and Noah buy the first home of their dreams?


Priced at $650,000, the house they want will require a 20% deposit of $130,000.

$650,000 x 20% = $130,000

Because Kiwisaver allows you to withdraw all but $1000 towards buying your first home, Jessica and Noah withdraw $29,000 each and now have $58,000 towards their deposit.

$29,000 x 2 = $58,000

With $72,000 remaining, they pay for this from having saved their $1000 fortnightly for 2 years & 10 months.

26 (year 1) + 26 (year 2) + 20 (year 3) = 72 fortnights

$1000 savings x 72 fortnights = $72,000

They also apply for a Kiwisaver HomeStart Grant to see if they will be eligible for the maximum amount of either $5000 on an existing home or $10,000 on a new build (like a Kiwibuild home). Their families might also contribute a few thousand dollars as a gift. Ta-da, extra money towards the deposit!


With the deposit paid, Jessica and Noah are looking to borrow $520,000.

$650,000 house purchase price – $130,000 deposit = $520,000

They input their financial details into the mortgage calculator of three banks and compare the fortnightly payments if they were to fix their mortgage for the first two years.

To do this, I’m going to use the bank’s current 2 year fixed interest rate and both the “How Much Can I Borrow?” calculator and the “How Much Will My Repayments Be?” calculator. Using all the details of their financial situation listed above, here’s what we get:


They can borrow up to $520,000 – perfect – and make fortnightly repayments of $1169.

Kiwibank Mortgage Calculator

Kiwibank Mortgage Calculator 2


They can borrow over $520,000 but if they choose to stick to $520,000, they would make fortnightly repayments of $1191.

BNZ Mortgage Calculator

BNZ Mortgage Calculator 2


They can borrow over $520,000 but if they choose to stick to $520,000, they would make fortnightly repayments of $1186.

ASB Mortgage Calculator

ASB Mortgage Calculator 2

Jessica & Noah secure their mortgage, sign the papers, gets the house inspected by a builder, engineer and meth tester, and voila.. They move into their new home!

So there you go – Jessica & Noah bought their first home in Auckland using the following:

$58,000 – Kiwisaver First Home Withdrawal
$72,000 – Savings
$520,000 – Mortgage

An alternative to this might be:

$58,000 – Kiwisaver First Home Withdrawal
$80,000 – Savings, Kiwisaver HomeStart Grant, gifting
$512,000 – Mortgage

But wait – what might their budget look like now?

They’re still earning $100,000 as a couple and bring home $3022 per fortnight, but now they’ve got a mortgage, home insurance & rates to think about.

Their new fortnightly expenses might now look like this:

Expenses: $2180

Mortgage – $1200

Home Insurance – $100

Council Rates – $80

Food – $300

Utilities (Power, Water, Internet) – $200

Miscellaneous Expenses / Buffer – $300

Of course, with my over-estimated figures as mentioned, they may well have plenty more moolah to save or spend even after all their expenses.

Here are some other things Jessica & Noah might have done:

  • Applied for a Welcome Home Loan from one of the lenders under the scheme, such as Kiwibank, TSB, Westpac and Co-Op Bank – requiring only a 10% deposit if eligible
  • Saved for their deposit over a longer time span (ie. less than $1000 and for over 2 years, 10 months)
  • Had their Kiwisaver contribution rate at 8% and invested in the First Home Buyer Fund
  • Received a considerable amount in gifting, eg. if one of their family members decided to gift $100,000, or perhaps offered to act as guarantor
  • Enlisted the help of a mortgage broker, who would help them negotiate interest rates – because the interest rates we saw aren’t the lowest the banks can offer!
  • Massively increased the affordability & ease of buying a home by choosing an apartment, or moving to a city that isn’t Auckland, Wellington, Christchurch or Queenstown

I hope you’ve enjoyed this post! Got any thoughts? Comment below or message me here. And if you liked this, you might like my other posts on homeownership.




2 thoughts on “How to Buy a $650,000 House in NZ

  1. A person earning $50,000 does not pay 30% tax on their entire salary. NZ uses a tax bracket system. A person earning $50,000 would pay 10.5% tax on $14,000, 17.5% tax on $34,000 and 30% tax on the remaining $2,000. This calculator explains it well: https://www.ird.govt.nz/calculators/keyword/incometax/calculator-tax-rate.html Or my personal favourite is: https://www.paye.net.nz/calculator.html (although it doesn’t break down the tax like the first calculator). Including 4% for Kiwisaver, means that Jessica or Noah would bring home $1,510.97 individually every fortnight. They could get a home faster and better afford the mortgage payments. 🙂

    (I ummed and ahhed about whether to make this comment. I don’t want to come off as mean, especially because I think its a great post otherwise and I love to see people use NZ examples!)

    Liked by 1 person

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