Buying guide

Rent to own: The first time buyers guide

Can’t quite get a mortgage? There might be another way

Last updated: 22 April 2024

Buying your first home in New Zealand is hard and it’s easy to see why. The average asking price on Trade Me in February 2024 was $876,250, which means a 20% deposit is around $175,000.

Rent to own or rent to buy schemes are one solution that can break down some of the barriers to owning your first home. Here’s everything you need to know.

Rent to own explained

Rent to own is an agreement that gives the tenant the right to purchase the home they're living in after a predetermined period - usually five years. These agreements are made to benefit the tenant by providing stable, affordable housing then supporting them as they purchase the property.

These schemes can be worthwhile if you’re struggling to save a deposit, or you keep having mortgage applications declined by lenders.

How does rent to buy work in NZ?

Rent to own schemes all have different terms and conditions, but they often have a few things in common:

  • A five year occupation agreement: this gives you the right to live in the home for up to five years without worrying about the landlord evicting you. 

  • A right to purchase: after the occupation agreement period ends you’ll have the right to purchase the home and won’t have to compete with other buyers. You don’t have to though - if you don’t want to or you can’t afford it you’re not required to buy the property. 

  • Reduced rent: rent to buy houses often charge lower than market rent to make it easier for tenants to save a deposit. Some even cap rent at 30% of your gross income. 

  • Support when buying: Most rent to own NZ schemes help buyers get a deposit together and make it easier to get a mortgage. 

  • Help with finances: this includes help creating a budget and financial plans and support while they work towards goals. 

These rent to own programs often provide different types of support - it’s a great idea to check what’s on offer before agreeing to anything to make sure it’ll benefit you. 

Rent to buy schemes can be a great way to get into a stable home sooner.

Am I eligible for rent to own NZ?

Most rent to buy schemes in NZ are designed to help people into home ownership who otherwise might not be able to achieve it. To achieve this they have eligibility requirements that limit the amount of income and debt you can have. 

For example, to be eligible for the Housing Foundation scheme you must: 

  • Be a New Zealand citizen or permanent resident. 

  • Not own a home or have purchased a property before. 

  • Have at least one person in the household in full time employment. 

  • Have manageable debt that can be paid off in five years. 

  • Have an income below a certain threshold, usually between $65,000 and $95,000 per year before tax. 

Some rent to own schemes, such as Ka Uruora, even require you to complete a financial education course before signing up. 

6 things to know before you sign up for a rent to own scheme

1. Do you get a share of my house’s value growth?

Some rent to own providers in NZ give renters a share of the property’s capital gains after the first five years to go towards their deposit. For example, the NZ Housing Foundation gives participating tenants 25% of the property’s price growth in cash to go towards their deposit after the initial five year period. That means, if you entered a rent to own agreement on a property initially valued at $500,000 and it increased in value by 5% each year you’d get over $35,000. 

Make sure you understand whether your scheme offers this benefit and ask your provider how the property is valued at the start and the end of the rental period. 

2. Does your rent go towards your deposit or fees?

Many rent to buy schemes put a portion of rent payments aside to go towards the tenants house deposit at the end of the five year period. If this is the case, it’s good to know how much of your rent is going towards a deposit and what happens to that money if you decide not to buy. Many schemes also charge one-off and regular fees that may come out of your rent - so it’s worth knowing how much they are. 

Rent to own schemes can make it easier to save a deposit.

3. What happens if property prices go down?

If house prices and rent prices go down does your rent decrease? And how does that affect the purchase price of the property and support you’re receiving from the provider? .

4. Will the provider help me buy?

In some cases the provider will offer shared ownership on top of a rent to own scheme. In other words, if you don't have enough to purchase the full property they’ll finance the rest and give you the chance to buy that portion of the property back from them over time. In most cases the buyer will need to be able to finance at least 60% of the property’s purchase price. 

Can I get a mortgage?

If you can’t arrange finance at the end of the five year period you may not be able to buy the home and in some rare cases you may even lose the deposit contributions you paid to your provider. To avoid this it’s best to get an indication on how much you can borrow before you enter into the agreement and make sure you follow your savings goals so that you have enough deposit. 

6. What if I want to leave and not buy the home?

Find out what happens if you decide to exit the scheme without buying. What will happen to any deposit contributions you’ve made throughout your tenancy?

Rent to own providers include:

The Housing Foundation

New Zealand’s largest provider of rent to own properties. A charitable housing trust that started in 2007 and has since helped over 1,000 families into high quality, affordable homes in collaboration with iwi and local government. 

Rent to own homes available in: Bay of Plenty, Auckland.


A government and Auckland Council-owned entity that provides both rent to own and shared ownership programs to help those who live in the Auckland area stay here - especially Māori and Pasifika. 

Rent to own homes available in: Auckland.

Do your homework before applying to a rent to buy scheme.

Ka Uruora

Ka Uruora was funded as an iwi-led response to the housing crisis. They aim to empower and support whanau on their journey to home ownership with financial education, shared ownership and rent to buy schemes. 

Rent to own homes available in: Taranaki, Auckland. 

Doing Good Foundation

A housing foundation that helps build properties then empowers families in need to own their own homes via a rent to own scheme. Scheme participants will contribute 500 hours of labour to the home build.

Rent to own homes available in: Tauranga, Bay of Plenty.

Queenstown Lakes Community Housing Trust

An independent, not-for-profit organisation that aims to ensure residents in the Queenstown Lakes region have access to healthy, secure housing. Their Rent Saver programme includes a feature where the trust matches your deposit savings for five years, up to a maximum of $13,000. 

Rent to own homes available in: Queenstown Lakes

Habitat for Humanity New Zealand Limited

A not-for-profit organisation and registered community housing provider that provides rent to own schemes for mid to low income families throughout New Zealand. 

Apply for a rent to own scheme

If you need a hand getting onto the property ladder it’s usually easy to apply for a rent-to-own scheme if you meet all the requirements. Visit the website of a provider in the area and look for a link to apply online or register. If there isn’t one, contact the provider directly to get started. 


Ben Tutty
Ben Tutty

Ben Tutty is a regular contributor for Trade Me and he's also contributed to Stuff and the Informed Investor. He's got 10+ years experience as both a journalist and website copywriter, specialising in real estate, finance and tourism. Ben lives in Wānaka with his partner and his best mate (Finnegan the whippet).