Buying your first home is a thrill, as you try to stretch your budget into the best value home on the market. You’d be amazed at how much you can accomplish with your savings. In New Zealand, plenty of options are available to help you with your deposit, so the number you’re dealing with is even bigger than the one on your bank statement! If you’ve found an affordable home in Auckland you want to move on today, a better understanding of your resources could spell success, so now is the time to familiarise yourself with your KiwiSaver and other government programs designed to help you.
Below, we look at some of the programs that can put you in a better position to secure your dream home.
Starting Expenses for First Home Buyers
As a first home buyer, you’re likely new to the home buying process, and that means you’ll soon discover that there are a few more expenses than you were initially aware of. In addition to your deposit, you’ll need to save for your first mortgage payments, legal fees for the lawyer you’ll need to review your mortgage, building inspections, and new insurance premiums.
In other words, you won’t be able to use all the money you’ve saved into just your deposit. This may make you feel like you’re further away from your goal than you’d hoped or that you’ll have to settle for a lesser home, but don’t get discouraged! New Zealand celebrates first home buyers, and the government has a few helpful programs in place to help you attain a first home that fulfils your dreams.
Financing Help for First Home Buyers
Ideally, you will have enough saved up to put down a 20% deposit on your first home, though many first home buyers choose to make their move sooner than that. For existing homes, 10% is typically the minimum deposit, while the minimum for turn-key builds is 5%. The more you can put down for your deposit, the better, as mortgage lenders have a different set of criteria for deposits of less than 20%.
Fortunately, you don’t have to rely solely on your savings to meet your deposit goal. As a first home buyer, you also have the following government programs to help you put down an ideal deposit on your dream home.
First Home Grant
The First Home Grant is available to first home buyers who have been making regular contributions to their KiwiSaver for a minimum of three years. The government grant allows you to receive $1,000 toward your deposit for an existing home for every full year you’ve contributed to your KiwiSaver, up to a maximum of $5,000. However, you can receive more from the grant if you opt to buy a new build; the First Home Grant will pay $2,000 toward a new build deposit for every year of your KiwiSaver, up to a maximum of $10,000. What’s more, if you’re a couple, you can each apply for a First Home Grant, receiving a maximum of $20,000 to put toward your new build first home!
First Home Loan
The First Home Loan is available through select New Zealand banks. This is paid to applicants in the market for their first home who enough money for a 5% deposit on a house that costs less than the designated price cap for that region. You can qualify for the NZ First Home Loan if your annual income before tax is less than $85,000, or $130,000 for couples. The lending bank will also examine your credit history and other financial factors to determine your fitness for the loan.
KiwiSaver First-Home Withdrawal
In addition to grants and loans, you can also supplement your deposit savings with your own KiwiSaver contributions. Like the First Home Grant, you will need to have been contributing to your KiwiSaver fund for a minimum of three years. Additionally, you must leave at least $1,000 in your KiwiSaver account.
We understand the help available to you
At Solution Street, we’ve developed freehold Auckland homes with first home buyers in mind. That’s why we help our clients take advantage of every government program available to them so that they can enjoy the best new home their money can buy! We pride ourselves on building some of the most accessible new homes in Auckland. Contact Solution Street today to start your journey towards your dream home!