Your first home is a thrilling milestone, but it can also be daunting, especially if you don’t know where to start. If you haven’t yet explored the options KiwiSaver offers for first home buyers, you may be closer to your deposit goal than you think! You can secure your financing and move in faster when buying your first home with KiwiSaver.
How KiwiSaver can help you buy your first home
When you decide to purchase a home, you need to work out how much you can afford. You’ll want to break this down into three primary costs: the sale price of the home, the deposit, and your regular mortgage payments. Your Kiwisaver can be applied to your deposit, but it can also have a ripple effect that lowers your mortgage payments by helping you secure a better interest rate.
Accessing your KiwiSaver Money
It’s vital to apply for your first home withdrawal early. To be eligible for a first home withdrawal from your KiwiSaver account, you must ensure the following:
- You must not have made a withdrawal from KiwiSaver for this purpose before
- You need to have been a member for at least 3 years
- The house you’re purchasing must be in New Zealand
- The home you’re buying must also be your intended principal place of residence
If you’re eligible, you can then apply to withdraw the total amount in your account minus $1,000 and any amount transferred from an Australian complying superannuation scheme. You can now use your KiwiSaver savings towards the deposit while your sale and purchase agreement are still conditional. Alternatively, once the offer is unconditional, you can put your KiwiSaver savings towards the purchase price at settlement.
Applying for your KiwiSaver HomeStart Grant
When you’re eligible to withdraw your KiwiSaver, you may also be eligible for a First Home Grant from Kāinga Ora. The amount you’re eligible for will also depend on whether you’re buying an existing or a newly built home. For existing homes, the maximum grant you can receive is $5,000, given that your yearly contributions to KiwiSaver amount to $1,000. A maximum of $10,000 grant is given to individuals purchasing newly built homes, given their year-on-year contributions total $2,000.
To apply, you need to download and print out your KiwiSaver transaction history showing Housing New Zealand proof of your regular contributions
Maximising your KiwiSaver
Using your KiwiSaver account can jumpstart your home purchasing journey. However, to fully maximise your KiwiSaver, you must make sure you’re putting in more than the minimum so that you’ll have more options when you’re ready to use those hard-earned savings.
- Make additional contributions
If you’re buying a home soon, you can boost your savings by making additional contributions to your KiwiSaver at any time. These contributions allow you to obtain additional funds so you can purchase the home that’s truly right for you.
- Choose the right fund
You can invest your KiwiSaver at various risk levels, from conservative to aggressive. Make sure you’re investing in a KiwiSaver scheme that’s specific to your needs. If you intend to use your KiwiSaver to someday buy your first home, make sure to communicate your goals to your KiwiSaver manager so you can get the appropriate advice suitable to your circumstances.
- Treat your KiwiSaver fund as a bonus
Let KiwiSaver serve as a bonus to your deposit. The more of your deposit you put together through savings, the more your first home withdrawal allows you to secure lower interest rates.
- Combine KiwiSaver withdraw funds with a co-purchaser
If you have friends or family co-purchasing the property, all eligible members can pull their KiwiSaver funds and combine them together. Every person with a share is eligible to withdraw, lightening the load of the withdrawal amount compared to when you’re purchasing on your own.
Finding the right home, you can afford
Once you’ve got your home applications approved and sorted, the next big step is finding the right home for you. At Solution Street, we provide you with affordable and desirable homes in sought-after communities throughout Auckland. Our team can help you find the right home and guide you through the process of buying a first home with KiwiSaver, Welcome Home Loans, and the First Home Grant.
Ready to move into your new home? Partner with us! Get in touch with our team today!