Your home-buying budget is the amount you can borrow, plus whatever savings you can contribute as a deposit.
The amount you can borrow depends mainly on how much you can afford in home loan repayments – our handy calculators can help you figure this out.
Remember to account for rates, insurance and home maintenance when you work out how much you’ll be able to spend on repayments.
In most cases, you will need at least a 20% deposit. There’s some great information and calculators on sorted.org.nz to help you get started.
If you’re eligible for a Welcome Home Loan, a scheme supported by Housing New Zealand, you may be able to borrow with less than a 20% deposit.
It can be a good idea to save an extra $2,000 – over and above your deposit – to cover lawyers’ fees, movers’ fees, and the cost of things like builder’s reports and registered valuations.
If you’ve been contributing to KiwiSaver for at least three years, you could be eligible for a KiwiSaver HomeStart grant (formerly the KiwiSaver first home subsidy). There are two levels of funding available:
For more information and an outline of the full eligibility criteria check the Housing New Zealand website.
For deposits of less than 20%, you may be charged a Low Equity Fee (LEF).It’s a one-off fee charged at the start of your loan. You can choose to either add this to your loan or pay it up front.Be aware that adding it to your loan means you’ll pay interest on it over the course of your loan.
Saving your deposit can be hard – but the more you can save, the less you’ll need to borrow, and the sooner you might be able to get mortgage free.
If you have a deposit of less than 20% of the house’s value, you might still have options. If you’re eligible, you could apply for a Welcome Home Loan.
The key to building savings is adding to them regularly. You won’t be tempted to touch your savings if you make sure you leave yourself enough money for everything you’ll need between pays – so be realistic about how much you can save and how often.
Setting up (and sticking to) a budget is important – a financial management tool like heaps! can help. Find out about budgets at sorted.co.nz
If you don’t have a savings plan in place, you can consider putting your savings into a term deposit or a Kiwibank Notice Saver. Under these accounts, you will earn better interest on your investment than a savings account.
We’ve got some clever services that can save your money for you.
With a sweep, your money is automatically swept to or from different accounts when you reach a chosen maximum or minimum amount. For example, you can set a sweep on your everyday account so that everything over a specified amount is swept into your savings at the end of the day.
PayStream splits your pay before you see it. When your pay comes in, your specified amount is automatically redirected into your savings or bills accounts – before you ever see it.
Debts are taken into account when you apply for a home loan, so it’s good to pay off as many as you can. Consider consolidating debts like credit cards, hire purchases or loans into one personal loan to help you pay them off faster.
Make sure you close the accounts after you consolidate cards or loans. The limits won’t be taken into account in your home loan application - and you won’t be tempted to run them back up again.
A conditional approval means the bank has agreed in principle to lend you a certain amount of money. It gets things moving, because when you find a house you want and it’s time to complete your application, the bank already has your information.
A conditional approval is free and doesn’t lock you into a loan or even a specific bank. It gives you confidence – you know how much you can spend. It also gives you bargaining power because your finance is conditionally approved.
We have our own special website and app for conditional approval called Home Hunter. Just go and sign up to Home Hunter, and you can apply for conditional approval straight away – applying only takes ten minutes. Once you’re conditionally approved, you can then home hunt armed with a bounty of extra info — see Kiwibank’s estimated price range, which houses could match your conditional approval, and a whole lot more. Check it out.
To apply for a home loan with Kiwibank you will need to be at least 18, be a permanent New Zealand resident and have a good credit history. Get in touch if you have any questions – we’ll be happy to answer them for you.
You don’t have to go through the home buying process alone. Friends and family who have bought houses can provide invaluable advice about what to do and not to do. Just remember to double check anything you’re told so you know you’re not being put wrong.
At any stage, you can talk to one of our Mobile Mortgage Managers - experts who come to you to talk about what you want. Our Mobile Mortgage Managers can give you obligation-free advice, help you figure out what you can get, and guide you through the process and the paperwork right to the end.
We also have Banking Consultants at our branches who you can meet to talk about what you need.
Kiwibank Notice Saver is a Portfolio Investment Entity (PIE). Units in Kiwibank PIE Online Call Fund, Kiwibank PIE Term Deposit Fund and Kiwibank Notice Saver are distributed by Kiwibank Limited and are issued by Kiwibank Investment Management Limited. Download the Investment Terms and Conditions for Kiwibank Term Deposits, the Kiwibank PIE Term Deposit Fund, the Kiwibank Notice Saver, and the Kiwibank PIE Online Call Fund. (PDF 314.9 kB) or pick up a copy from your local Kiwibank
A Kiwibank Welcome Home Loan is only available for owner-occupied properties and may not be used to purchase an investment property or for refinancing. You must not already own a home. A minimum deposit of 10% is required. Borrowers may be able to use any KiwiSaver Deposit Subsidy and First Home Withdrawal entitlements to contribute to their deposit. A low equity fee may apply.
All banks, including Kiwibank, are subject to the Reserve Bank restrictions on lending over 80% of a property’s value
This is intended as general information only. It does not take into account your financial situation and goals and is not personal advice. For advice about your particular circumstances please see a financial adviser, or make an appointment with a Kiwibank Wealth Adviser.