First Home Buyer Cheat Sheet

It’s been a hard time lately if you’re a New Zealand first home buyer. Price rose by 31% then CCCFA was introduced and now interest rates are rising, making it more difficult for first home buyers to jump the property ladder. Here are some support & suggestion that may help you be a homeowner.

First Home Loan 

First Home Loans (FHL) has now changed, to make it easier for more people to qualify. Most banks will want a minimum of 20% from you as a deposit, but an FHL allows you to get a low deposit loan with only 5% down. They’re only provided by certain lenders (like Westpac) and are underwritten by Kāinga Ora.

First Home Grant 

If you’re buying an existing house, you could get up to $5,000 as an individual, or $10,000 if you’re buying with someone else. If you’re building, you could get up to $10,000 as an individual, or $20,000 if you’re buying with someone else from the government. 

First Home Partner

Another option for those with a small deposit, but this time, the government buys in alongside you. In other words, shared ownership. You need to have at least a 5% deposit, and then Kāinga Ora will buy-in up to 25%. The government wants you to buy them out within 15 years.

Kiwi Saver 

If you’re putting in 3% of your wages, your employer legally has to match you. You also get a government tax break of $521.43 a year. Some employers will match more than 3%. You can use your Kiwi Saver as a deposit for your first home. Hint: If you’re using to buy within six months, ask your Kiwi Saver provider to put your account in conservative gross in order to protect your deposit money. 

Spending lockdown

Particularly after the CCCFA changes, banks will now check everything to reduce your lending. The best approach is to put yourself into a spending lockdown three months before going to the bank.

Building type

Apartments and townhouses are often cheaper because they use less land. A townhouse is a fairly simple way to buy a cheaper property, as banks often treat them the same as buying a traditional house. Many banks will refuse to lend on tiny apartments, of 30 sqm or so.

New Build

Banks are more flexible to provide loans with less deposits on newly built properties compare to the existing house.

Kāinga Whenua

This one is for Māori to achieve home ownership on multiple-owned Māori land. It’s a partnership between Kāinga Ora and Kiwibank, this scheme can mean Kiwibank loans you 100% of the house’s (not land) purchase price, or the house building costs, up to $200,000.

Other Solutions 

If you are not qualified for the above situation maybe there is another solution for your specific case. This is why it can be a good idea to meet up with property experts to see if they have any innovative solutions for you. It doesn’t cost you anything but time, and you might find something that works. Book your 30 minutes free session now.