Building a deposit

FIRST HOME

Building a deposit

Saving for a deposit can be really tough, but here are a few tips to set you on your way to home ownership, fast. Because of Government-imposed loan-to-value restrictions, banks are picky about lending with less than 20% deposit. We can help you prepare for home ownership, add a professional touch to your loan application, and often get you approval with as little as a 10% deposit.

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Save regularly

The best way to build savings quickly is to do it automatically. Every time you get paid, put aside a portion into a savings account. The easiest way is to set up an automatic payment from your current account to your savings account on the day you get paid. You will find your savings build because you won’t spend what you don’t see. Your savings will also allow you to estimate what you can afford for a mortgage payment – it’s the amount you save plus the amount you pay in rent each month.

Save any bonuses

Commit to saving any unexpected sums of money you receive, such as bonuses or gifts. (There’s no harm in spending a bit of this money as a reward for your hard work, but you don’t want to get carried away. Make saving your priority.)

Family and friends can help

Sometimes you need extra help and this is where gifting can make the difference between renting and buying. Gifting is when someone (usually family) gives you some of the money you need for your deposit so you can qualify for a loan. You will need to show the bank where the money came from, but the gifter won’t have any future obligations to the bank.

Another way family can help is to provide their own property as part security for your mortgage. This allows them to use their assets to help you and means you could be able to contribute a lot less money up-front as a deposit. Of course, you must still be able to meet the repayments on your loan. Head to this page for more information about guarantors.

Use your KiwiSaver

You can now withdraw money from your KiwiSaver account to put towards your deposit. Find out more about that here. 

Look at Government assistance

If you’re in KiwiSaver you might qualify for a first home grant of up to $5000, or $10,000 for a couple who both qualify. You could also be eligible for a Welcome Home Loan, which is a low-deposit loan underwritten by Housing New Zealand. Check if you’re eligible for either of these here.