FIRST HOME BUYER GRANTS & INCENTIVES
Updated: Jan 11
If you are a first-home buyer, manoeuvring the mortgage loan process can be a tricky business. Not to mention overwhelming. So it’s important to keep on the lookout for any incentives and grants that banks or the government may be offering. A First-Home-Loan is a unique mortgage loan for first-home buyers, that only requires a 5% deposit. These mortgages are underwritten by Housing New Zealand and are issued by several lenders, including, TSB Bank, Kiwibank, Westpac Bank, The Co-operative Bank, and the SBS Bank.
Be aware that from 1st April 2021 the income limits for the First Home Grants scheme will be increasing. Borrowers can now obtain a mortgage loan with only a 5% deposit if they earn under $95,000 a year for one person, or below $150,000 for two or more individuals purchasing together.
There are stringent cost caps on the properties you hope to buy. These vary from region to region and depend on whether you are buying a brand new or existing home. The most a property can cost to be eligible for the scheme is in Auckland where a new property is limited to $700,000 and an existing property can not be more than $625,000. If you are looking for houses for sale Wanganui, Waverley, Marton or Bulls, then this should not be a problem for you with lower property values in these areas.
Some banks will also give you a cash contribution of $2000 towards your purchase. Other banks, like Kiwibank, have special savings and mortgage bundles that give you special offers and incentives for saving for your first home. They also offer discounted home loan rates so it’s worth asking around.
If you have contributed to KiwiSaver for at least 3 years you will also be able to withdraw some of your savings to buy your first home. If you have a partner who has been a member of KiwiSaver for at least 3 years as well, they can also withdraw some of their savings so long as you maintain a minimum balance of $1000 in your KiwiSaver account. You also have to live in the home that you buy for at least six months so it cannot be an investment property. A good source of information is the government website https://kaingaora.govt.nz/home-ownership/first-home-loan/
About the Author
Steve Baron is the Founder & CEO of Whanganui Mansions. He is a former successful real estate agent and property investor when based in Auckland and formerly the Managing Director of Baron Marketing Ltd, an advertising company he founded and ran for over 20 years. He is a past mentor for Business Mentors NZ and holds a Bachelor of Arts Degree from the University of Waikato Majoring in Economics & Political Science. He also holds an Honours Degree from Victoria University of Wellington in Political Science. He is a published author of three books and a prominent guest editorialist for newspapers throughout New Zealand. In his spare time, Steve is the Clerk of the Scales for New Zealand Thoroughbred Racing, is a Bridge Grandmaster and enjoys walking, running and cafes.
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