November 13, 2024
Buying your first home in New Zealand can feel like a big leap, especially when it comes to understanding deposit requirements. The good news is that with various options for 5%, 10%, and 20% deposits, first homeownership is within reach for many. In this guide, we'll break down everything you need to know about deposit requirements, government support, and tips to help you reach your homeownership goals.
The typical deposit required by most lenders in New Zealand is 20% of the property’s purchase price. This amount offers lenders a sense of security and can help you avoid additional costs such as mortgage insurance. However, not everyone needs a 20% deposit, thanks to special programmes aimed at first home buyers.
For those interested in new-build properties, some banks offer loans with as little as a 10% deposit. Banks generally view new builds as lower-risk investments, which can make it easier for first home buyers to enter the market with a reduced deposit requirement.
The Kāinga Ora First Home Loan is specifically designed for eligible first-time buyers, allowing them to secure a mortgage with just a 5% deposit. However, certain income and property price caps apply, so be sure to check your eligibility. This option is ideal for those who may not have the full 20% but are eager to step onto the property ladder.
If you’ve been contributing to KiwiSaver for at least three years, you may be eligible for the First Home Grant. This grant can range from $3,000 to $10,000 depending on how long you’ve contributed to KiwiSaver and whether the home you’re buying is new or existing. It’s a valuable resource to help boost your deposit.
For many first home buyers, KiwiSaver savings can be withdrawn to put towards their deposit. If you’ve been a KiwiSaver member for at least three years, you may be able to use these funds to supplement your deposit, making it easier to reach the required amount.
Pooling resources with friends or family is another way to make homeownership more achievable. Group buying is becoming more common as a way to reduce deposit requirements by combining funds, making it possible to purchase a property together.
Deposits may vary depending on the type of property you're buying, with lower deposit rates often available for new builds due to their perceived lower risk. This can make new-build properties an attractive option for first-time buyers looking to secure a home with a smaller deposit.
While it’s possible to buy a home with a smaller deposit, there are advantages to saving a larger amount. A 20% deposit typically allows you to avoid mortgage insurance and may offer access to better interest rates, reducing your overall loan costs.
Buying a first home is a major step, but with the right information, planning, and support, it’s an achievable goal. KEY2 Real Estate is here to help you find the perfect property to suit your needs and budget. Whether you’re saving for a 5%, 10%, or 20% deposit, we can guide you through the process and connect you with properties that fit your financial situation.
Understanding your deposit options is key to making informed decisions as a first home buyer in New Zealand. From government grants to low-deposit loans, there are several paths to homeownership. At KEY2 Real Estate, we’re committed to helping first-time buyers achieve their dreams of owning a home. Explore our listings and take the first step toward your new home today.
Source:
KEY2 Real Estate Ltd
