At Personalised Mortgages, we know that putting together the deposit for a home can be hard work. That’s why our friendly mortgage advisers take the time to properly understand your financial and property ownership goals and are proud to have helped thousands of people into their first homes.
With their expert knowledge of the New Zealand home loan market, our advisers can help you understand the various ways you can get into your first home with less than the standard 20% deposit.
A loan-to-value ratio (LVR) refers to how much a bank lends against a mortgaged property, when compared to the value of that property. For owner occupier loans, a high LVR mortgage usually refers to any home loan taken out with less than a 20% deposit, meaning a loan-to-value ratio of greater than 80 percent. Buyers should be aware that lenders often charge higher interest rates on high LVR loans, meaning higher mortgage repayments.
There are several different ways you can get into a home without saving a 20% deposit. These include the New Zealand Government’s First Home Loan scheme, getting assistance from family members or choosing to build your home.
If you’re unsure which option is best for you, why not talk to one of Personalised Mortgages trusted mortgage advisers. They can help determine what assistance you may be eligible for, while also helping you choose the right to meet your goals. Best of all, our services are usually free, so get in touch with one of our Auckland-based mortgager advisers today.
You can learn more about getting your first home loan here.
First Home Loans are offered by selected New Zealand banks and other lenders and are underwritten by the Crown agency Kāinga Ora. Because these loans are underwritten, lenders are able to provide loans that would not normally meet their lending standards. For example, this allows lenders to provide home loans with a 5% deposit, rather than the more common 10% or 20% deposits normally required.
To qualify for Kāinga Ora’s First Home Loan scheme, you’ll need to meet certain criteria. Firstly, you’ll need to live in the home you’re buying. To be eligible for a 5% deposit home loan, sole buyers without dependents also need to have an income for the previous 12 months of $95,000 or less before tax. This increases to $150,000 before tax in the last 12 months if you’re the sole borrower with dependents. If you’re buying a home jointly with other people, the threshold is a combined $150,000 before tax. You can find the most up-to-date eligibility requirements for the First Home Grant here.
The property being purchased must also fall under a determined house price cap which differs between regions and cities. These price are subject to change, and the current regional house price caps for both existing properties and new builds can be found here on Kāinga Ora’s website.
If you’re building or buying a new build home, you may only require a 10% deposit for an owner occupied property.
You can learn more about building your own home and construction loans here.
Some New Zealand lenders offer home loans that utilise a family member’s home as security on your mortgage. These loans come in different structures, each with advantages and disadvantages, so it is definitely worth getting expert advice from a qualified mortgage adviser before proceeding with this loan type.
A low deposit home loan refers to buying a property with less than the standard 20% deposit. Lower deposit loan options include government schemes, building your first home, or using a family member’s property as security.
Under Kāinga Ora’s First Home Loans scheme, 5% deposit home loans are granted to qualifying first home buyers by selected New Zealand banks. A qualified mortgage adviser can tell you if you will qualify for a 5% deposit loan.
The smallest deposit required to buy a house in New Zealand is currently 5% of the property’s purchase price. This 5% deposit applies to some turn-key builds and for loans underwritten by Kāinga Ora’s First Home Loans scheme.