First Home Buyers
Congratulations! You’ve made the big step of buying your first home. The secret to taking the stress out of this is to plan and get the right help each step of the way. First Step Home Loans are here to help you.
Starting out as a potential home buyer, it’s important to look at all of your options and to engage with experts before you put an offer on a house or apply for a mortgage.
Every bit you’ve saved will go towards your deposit resulting in you having to borrow less. Generally you will need a 20% deposit, in certain circumstances you may be able to have a smaller deposit. It’s best to aim for a 20% deposit as this will be cheaper in the long run.
Getting the deposit together for a new home can be challenging if you haven’t managed to save enough. Don’t despair there are other options available to help you with your deposit. You may have a family member who is happy to ‘gift’ you funds towards the deposit. These are options which many banks will accept though remember all banks have their own lending criteria so be sure to check.
Some banks are happy to accept that family members like to help each other and what better way than assisting with funds towards a first home buyers deposit.
Your deposit may be gifted, or you might come to an agreement to pay the loan back later. Either way we recommend all parties regarding gifting seek independent legal advice so everyone is clear on the expectations. It’s best to be on the same page from the beginning.
If you’ve agreed to pay the deposit back later, make sure you have an agreement in place on how and when it is to be repaid.
In recent times the Government has implemented different schemes for first time home buyers. There are three schemes available and if you are lucky enough you may qualify for all three. Please see below for more information on the current schemes available to you.
Kiwi Saver First Home Withdrawal
Unlocking your KiwiSaver can help you get into your first home sooner. If you’ve been a member of KiwiSaver for at least three years, you may be able to withdraw your KiwiSaver funds to put towards your first home.
- You’re intending to live in the property (KiwiSaver cannot be used to buy an investment property)
- It’s the first time you're withdrawing from KiwiSaver to buy a home or land to build your home on
- You will leave a minimum balance of $1,000 in your KiwiSaver account
- The property is located in New Zealand
Kiwi Saver First Home Grant
Kainga Ora offers First Home grants for eligible KiwiSaver members to help them buy their first home. The First Home Grant provides eligible first-home buyers with a grant to put towards purchasing their first home or building their first home. The grant can be up to $5,000 for individuals and up to $10,000 where there are two or more eligible buyers.
- You must be 18 years or over
- Have not received the First Home Grant or KiwiSaver deposit subsidy before
- You must have contributed regularly to KiwiSaver for a minimum of three years, at least the minimal allowable percentage of your total income.
- Earned $85,000 or less (before tax) in the last 12 months as a sole buyer or if two or more buyers had a combined income of $130,000 or less (before tax) in the last 12 months.
- Have a deposit that is 5% or more of the purchase price. This can include the KiwiSaver first home withdrawl. The First Home Grant and any other such funds as savings or a deposit gifted by a relative.
- House price Cap: The price of the house you are buying with a First Home Loan must be less than the regional house price cap.
- You need to be a New Zealand citizen or permanent resident
- You can not own any other property
A gift from family
You may be able to get family to help out with your first home deposit. You might have the income to service the loan, but don’t have a high enough deposit without a family member helping.
Your deposit may be gifted, or you might come to an agreement to pay it back later. We recommend that you both seek legal advice so you’re both clear on the expectations.
If you’ve agreed to pay back the deposit later, make sure you let us know as this could affect your loan depending on when you’ve agreed to pay it back.