We hope you’re excited to start your home journey. For first home buyers in NZ, it can be hard to know where to start. We know it can be daunting, with unknown terms and processes to work through, but buying your first home is also one of life’s significant milestones, with plenty of fun steps throughout the journey – culminating in your housewarming party!
With the Total team working for you, you can rest assured you’re in expert hands. We’ve helped thousands with their first home loans in NZ, and making the process easier and more straightforward is our M.O.
What can our team do for you?
- Determine your borrowing limit.
- Recommend suburbs that match your price range.
- Compare over 20 banks and lenders to get you the best mortgage deal.
- Our state-of-the-art software enables you to instantly complete an application from your own device and is accepted by all lenders.
- Assist with property reports, inspections and valuations, as well as bidding at auctions.
- We keep it simple, explaining everything in layman's terms.
And most importantly – working with a mortgage adviser generally comes at no cost.
If you’re ready to get started on your home-buying journey with Total, it’s time to start thinking about your finances. Read on to learn more about the different options to put together your first home deposit and your next steps towards home ownership.
Different options to form your deposit
If you’re buying your first home in NZ, the first point to know is that banks won’t lend the full amount for a house, so you need to come to the table with a deposit. The size and make-up of this deposit is where everyone’s situation is different, and we’ll work with you to advise the best course of action.
While you may have heard that 20% is the ideal deposit, there are options for those that don’t meet this savings threshold to either reach it or get a bit closer:
KiwiSaver
If you’re a first-home buyer you can withdraw your KiwiSaver funds to use as a deposit toward your new home. You must leave $1,000 in your account and meet these other conditions:
- have been in a KiwiSaver scheme for at least three years,
- be planning to live in the house for at least six months, and
- be buying your first home
First Home Grant
The First Home Grant provides eligible first-home buyers with:
- Up to $5,000 for each individual to put towards the purchase of an existing/older home.
- Up to $10,000 per individual if you're purchasing a brand new home
Income eligibility includes a minimum annual income of:
- $95,000 or less (before tax) for a sole buyer.
- $150,000 combined for two or more buyers.
Plus, there is a price cap specific to each region of New Zealand.
First Home Loan
If finding a 20% deposit seems out of reach, the Government (under Kāinga Ora) offers First Home Loan, a first home buyers grant in NZ which only requires a 5% deposit. These loans are issued by selected banks and other lenders and underwritten by Kāinga Ora and have certain criteria, including an income and regional house price cap.
You can check the criteria here, and similar to the requirements of the First Home Grant, you must:
- Live in the home you're buying.
- Be an NZ Citizen or Permanent Resident.
Guarantees
These are often made by your parent(s) or other close family members as guarantors to guarantee the portion of a 20% deposit you don’t have saved.
The amount they guarantee is secured over their property or a term deposit, so they are using the equity in their own home rather than providing a cash payout to make up the 20% deposit.
One important point: your parents need to be in a stable financial position and working with a regular income, so if they are enjoying retirement, they may not be eligible.
We can talk through all the ins and outs of guaranteeing a loan with you and your parents so everyone knows how it works and any potential risks.
Saving for Your First Home Loan: 10% Deposits
While the market is tougher if you only have a 10% deposit, there are still banks that will lend. It will likely just mean the criteria you need to meet are a bit more lengthy. Lenders will generally require you to have a higher monthly surplus in funds to ensure you can service the loan and be stricter on income from any boarders or flatmates.
Don’t worry, we can help work through this with you with our loan servicing calculator.
Ready to get started?
It’s time to get in touch with us! We’ll work with you to find out how much you can afford to spend on your new home, so you can start hitting those open home viewings.
Plus, we can answer any of those burning questions you might have, whether it’s the time involved in applying, tenders and sale and purchase agreements, when and how to pay a deposit and what fixed and floating interest rates are.
Here at Total Mortgages, we know all the ins and outs when it comes to first home grants, low deposit home loans, and high lvr home mortgages. To find out more, book a call today.
