homeproperty777: The first step in saving for your deposit is to set yourself a savings goal. Most lenders will require a deposit of at least 20% of the amount you are borrowing. So if you’re buying a house worth $400,000 you’ll need to save a deposit of at least $80,000. There may be some exceptions, however, such as through the Welcome Home Loan Scheme, which would require a deposit of 10%.
Keep in mind that the bigger your deposit, the less you’ll pay in interest over the long term. Loans that are for more than 80% of a property’s value tend to be have higher charges – as there is more risk for your lender. These charges can vary a lot. Some banks charge for lenders mortgage insurance while others increase the interest rate to cover the risk.
Once you’ve worked out how much you need to save, use our money planner to work out a budget. You may need to cut down on non-essentials for a while but the satisfaction of moving into your first home will be worth it.
If there is a difference between what your mortgage repayments would be and what you are currently paying in rent, try adding that amount to your regular savings. It will give you (and your lender) an idea of how well your household budget will be able to cope. Use our savings calculator to see how quickly your savings can add up.
Government help
With a 10% deposit, you may be able to borrow enough to buy a house under the government’s Welcome Home Loan Scheme.
If you’re a KiwiSaver member and have been contributing to a scheme for at least three years, you may be eligible for a KiwiSaver HomeStart grant. This means that the government could give you up to $5,000 towards an older, existing home, or up to $10,000 towards a newly built home or land to build a new home on. If you're borrowing with someone else, you can combine your grants, which means you could have up to $20,000 if you were both contributing to KiwiSaver for five years. There are other eligibility criteria to meet, as well as regional house price caps.
You may also be able to withdraw almost all of the money in your KiwiSaver account to help buy your first home. This is called a KiwiSaver savings withdrawal.
Find out more about the KiwiSaver deposit subsidy and the KiwiSaver savings withdrawal on the Housing New Zealand website.
Once you’ve worked out how much you need to save, use our money planner to work out a budget. You may need to cut down on non-essentials for a while but the satisfaction of moving into your first home will be worth it.
If there is a difference between what your mortgage repayments would be and what you are currently paying in rent, try adding that amount to your regular savings. It will give you (and your lender) an idea of how well your household budget will be able to cope. Use our savings calculator to see how quickly your savings can add up.
Government help
With a 10% deposit, you may be able to borrow enough to buy a house under the government’s Welcome Home Loan Scheme.
If you’re a KiwiSaver member and have been contributing to a scheme for at least three years, you may be eligible for a KiwiSaver HomeStart grant. This means that the government could give you up to $5,000 towards an older, existing home, or up to $10,000 towards a newly built home or land to build a new home on. If you're borrowing with someone else, you can combine your grants, which means you could have up to $20,000 if you were both contributing to KiwiSaver for five years. There are other eligibility criteria to meet, as well as regional house price caps.
You may also be able to withdraw almost all of the money in your KiwiSaver account to help buy your first home. This is called a KiwiSaver savings withdrawal.
Find out more about the KiwiSaver deposit subsidy and the KiwiSaver savings withdrawal on the Housing New Zealand website.
