5 February 2013
My husband and I have been KiwiSaver members since it started. Previously I owned a property which I sold and bought my current house. Is there any way I can withdraw some of our KiwiSaver money and put it towards our mortgage?
When KiwiSaver started, members could choose to put up to half of their own KiwiSaver contributions towards repaying the mortgage on their home, after 12 months of membership.
This was called mortgage diversion.
Not all KiwiSaver providers offered mortgage diversion to their members and at the time very few members chose to use it. Mortgage diversion was closed to new applicants from 1 June 2009.
KiwiSaver members who are experiencing financial hardship may be eligible to make a withdrawal from their KiwiSaver accounts to meet the mortgage repayments on their home.
However, the criteria for financial hardship withdrawals are strict and government contributions cannot be withdrawn under this provision.
To qualify you would need to prove to your KiwiSaver scheme's trustee that the lender was looking to "enforce" the mortgage on your home because you were unable to meet the repayments. Enforcement typically involves a mortgagee sale, where the lender takes possession of a property and sells it to recoup the money owed. So it's very much a worst case scenario.
The information provided above is stated accurately to the best of our knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.
See our page on KiwiSaver withdrawal options.
Find out more about the KiwiSaver first home withdrawal.
Information from Inland Revenue on accessing KiwiSaver money early.