When you’re buying a property that you plan to live in, banks are more likely to lend to you if you have a deposit that’s at least 20% of a home’s value. So if you’re looking at a $700,000 home, you’d need $140,000 as a deposit.
Tip: Your deposit can be a combination of your personal savings, your KiwiSaver savings (if you’re eligible), and any financial help from friends or family.
Less than 20% deposit
If you don’t have a 20% deposit, you may still be able to buy a home, but you might have to pay a premium (called a low equity interest rate premium). Make sure you get in touch with your bank to talk through your options.
Do the maths on your mortgage
Borrowing calculator
Work out how much you could borrow, so you know how much you could afford to spend on a new home.
Repayment calculator
Calculate your mortgage repayments based on the cost of a home and the deposit you’ve got. You can change the mortgage term to see how that affects what you pay, and you can increase the interest rate to check you could still afford the repayments if interest rates go up.
Owning a home calculator
Work out the real cost of owning a home by adding up your potential repayments, insurance, rates, body corporate fees and more. Sorted.org.nz has a great budgeting tool for this.
Ways to get your deposit together
Now you know what your goal is, it’s time to start some serious saving. Here are some of the ways you can get your deposit together.
KiwiSaver
If you’ve been a member of a KiwiSaver scheme for 3+ years and meet the eligibility criteria, you may be able to apply to withdraw most of your KiwiSaver savings to put towards your first home. You need to leave at least $1,000 in your KiwiSaver account, and you can’t withdraw any Australian superannuation funds you may have transferred. You should get in touch with your KiwiSaver provider early – it can take some time to get your savings.
If you’re a first home buyer, you might also be eligible for a First Home Grant. If you meet the conditions, you could be provided with a grant of up to $5,000 for an existing home, or up to $10,000 for a new home, a home bought off the plans, or land on which a new home will be built. You can find out more about the First Home Grant on the Kāinga Ora website. Income and regional house price caps apply.
If you plan to use your KiwiSaver savings to buy a first home, it’s worth checking you’re in the right fund. The BNZ KiwiSaver Scheme has a fund designed for first home buyers, who are planning to withdraw their savings within three to five years.
Help from family
Your parents or other family members might be able to help by gifting you money or guaranteeing your loan.
If you’re given money, you’ll usually need to show proof it’s not borrowed and that it won’t need to be paid back. If a family member guarantees your loan, their home is used as security and they’re responsible if you can’t make your repayments.
Savings and investments
If you’ve just started thinking about buying, it’s smart to make your money work harder. We have a range of savings and investment options including an interest earning savings account, a term deposit, or a managed fund. If you want to use your savings in the next little while, make sure you choose an option that suits your investment goals and time frames.
It’s also good to do a weekly budget, and put any money you don’t need into your savings as soon as you’re paid. Calculate how long it’ll take to reach your goal with our savings calculator.
Got your deposit, what’s next?
Once you’re close to having your deposit ready, the next step is to talk to your bank about getting conditional approval (or pre-approval). That kick starts the home loan process, and means you can start looking for your new home.
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