"If you are not purchasing property then you would not be able to withdraw funds from your KiwiSaver scheme for the purposes of a first home or second chance home withdrawal.
"This withdrawal type requires the member to be involved in the process of purchasing property, as opposed to taking out a new loan where property which they already own or part-own forms security for the loan, or making repayments on an existing loan secured on a property," Whitelock says.
One of the features of KiwiSaver is the ability to withdraw money to buy a first home.
After three years of membership you can take out your contributions, any an employer has made, any member tax credits you may have earned and investment earnings.
The only money that has to stay in your account is the $1000 kick-start everyone receives when they open a KiwiSaver account and any funds that have been transferred from an Australian superannuation fund.
You will need a copy of a sale and purchase agreement in your name as part of the application process and your provider will pay the funds into your lawyer's trust fund around the time of settlement.
This process is set out in the KiwiSaver Act and doesn't allow for money to be transferred from a KiwiSaver fund to pay for a home at any time after the sale and purchase has gone through.
As Whitelock says, people who have previously owned a home, but no longer do and are in a similar financial position to a first-home buyer, may also be able to tap their KiwiSaver funds.
They will need to be assessed by Housing New Zealand to ensure they fit the criteria before their KiwiSaver provider will release the funds.
If you are feeling the financial pinch of servicing a larger mortgage by yourself on top of making KiwiSaver contributions it is possible to change the KiwiSaver payments you make.
If you're paying in more than the 3 per cent minimum you could knock that back and direct the extra funds towards your mortgage.
You can also take a break from KiwiSaver contributions by applying to the IRD for a contributions holiday.
Generally speaking you will need to have been in KiwiSaver for at least 12 months before you can take a contributions holiday, which can be anything between three months and five years - the default period is three months.
Again, you could channel the money you would have paid into KiwiSaver towards knocking down your mortgage.
The downside of a contributions holiday is you stop receiving any employer contributions and unless you make voluntary contributions you will also miss out on the $522 member tax credit money from the Government.
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If your financial situation has really deteriorated to the point you are unable to make mortgage payments and you're at risk of losing your home, then you can apply to your provider to consider releasing some of your funds under the financial hardship provisions.
There is a high threshold for financial hardship releases, which includes proving you've sought help from a budgeting service and providing documents to show you can't meet basic living costs.
Having an out-of-control hire purchase debt or a maxed-out credit card won't cut it.
Disclaimer: Information provided is stated accurately to the best of the respondent's 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.
To have your KiwiSaver questions answered by the Herald's panel of industry players email Helen Twose, helen@helentwose.co.nz. Sorry, but Helen cannot answer all questions, correspond directly with readers, or give financial advice.
