Sep 13, 2018 8:48:37 AM

A Guide for First Home Buyers

Topics: Mortgages, NZ Mortgage Adviser, NZ Property Market, NZ Property, Information on buying and selling, first home buyer, Kiwisaver, Welcome Home Loan, HomeStart Grant 0

The latest figures are out and they’re daunting to say the least! According to real estate statistics website One Roof, first home buyers in Auckland need to earn at least three times the median income in order to buy property. That’s a whopping $241,200 annually per household! So, how do you get a foot on that elusive property ladder? Here are a few options.

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KiwiSaver HomeStart Grant

Saving a deposit is probably the biggest hurdle most first home buyers face when trying to buy their own first home. With a little help from the New Zealand Government and KiwiSaver, you could be one step closer to securing your dream home.

As a member of KiwiSaver and provided you’ve been contributing for at least 3 years, you could be eligible for a KiwiSaver HomeStart grant through Housing New Zealand. For every year you’ve been paying into KiwiSaver, up to a maximum of 5 years, you could get $1,000 when you buy an existing home.

If you buy a newly built home or land to build on, you could get $2,000 for every year you’ve paid into KiwiSaver, up to a maximum of $10,000. And those figures double if you’re buying a first home with a partner who has also been contributing towards KiwiSaver. Which quickly adds up to a sizeable chunk of your deposit!  Take a look:

Buying a property with a partner who has also contributed to KiwiSaver means you could get a combined sum of $10,000 for an existing property or $20,000 for a new build.

There are some conditions though. You need to have been contributing the minimum amount of your income (which is currently 3%) towards your KiwiSaver scheme for at least 3 years; have an income of less than $85,000 for 1 person or a combined income of $130,000 for 2 or more people; have a deposit of at least 10 per cent of the purchase price of the property; and agree to live in the property you’re buying for at least 6 months. 

KiwiSaver First-home Withdrawal

Along with the KiwiSaver HomeStart Grant through Housing NZ, you can also apply to withdraw all of your savings from KiwiSaver to use as a deposit when buying your first home (as long as you leave $1,000 in your account), which can include all of your and your employer’s contributions, as well as any member tax credits. 

Welcome Home Loan

Underwritten by Housing New Zealand, a Welcome Home Loan is another option open to first home buyers with a low deposit. Not all lenders offer this option and there are certain conditions and criteria set by the government and your lender that you need to meet in order to qualify. These include meeting certain regional house price caps and income caps, as well as having at least a 10 per cent deposit of the purchase price of the property you want to buy.

To find out more about these Government initiatives designed to help first home buyers into their own homes, visit the New Zealand Government website or get in touch with a Mortgage Express adviser to find out if any of these options will suit you.

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Disclaimer:

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.

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