Welcome Home Loan is offered by lenders, supported by Housing New Zealand, and designed for first home buyers who can afford to make regular repayments on a home loan, but have trouble saving for a large deposit.
With a Welcome Loan you only need a 10% deposit, not a 20% percent deposit as required by most lenders.
Only available to personal customers buying a property to live in themselves – i.e. not available to family trusts or businesses or for an investment property.
Available to first home buyers and in certain circumstances second chance home buyers (conditions apply – net realisable assets must not exceed 20% of the relevant region loan value cap)
Customers must be NZ citizens or hold a NZ permanent residents visa
The maximum household income is $80,000 for one borrower or $120,000 for two or more borrowers. See www.welcomehomeloan.co.nz
The maximum amount you can borrow with a Welcome Home Loan depends on the region you are buying in. Each region has a house price cap. The maximum loan for that region is the house price cap less your 10 percent deposit.
The house price caps are:
Auckland – $550,000
Hamilton City, Tauranga City, Western Bay of Plenty District, Kapiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Nelson City, Tasman District, Waimakariri District, Christchurch City, Selwyn District, Queenstown Lakes District – $450,000
Rest of New Zealand – $350,000.
Welcome Home Loan Documentation Required
- Signed Welcome Home Loan Authorisation form, by all parties
- Verification of address
- 6 months transactional and loan account statements
- 3 months credit card statements
- Proof of NZ Permanent Residence
- 3 consecutive payslips and letter from employer / contract
- Proof of deposit / gift certificate
- Confirmation of LMI to be capitalised, or not
- Advice of any requirement for deposit to be advance prior to settlement
- Registered Valuation – needs to be extended to HNZC and signed by a ANZIV Valuer or higher
- Sale & Purchase Agreement
The deposit subsidy is a payment of $1,000 for each year of contribution to your KiwiSaver scheme, complying fund or exempt employer scheme for at least three years, up to a maximum of $5,000, after you have contributed for five years. Please note that if eligible, this subsidy is paid to your solicitor on settlement day only. If you live in the house you have bought for a minimum of six months, the subsidy does not have to be paid back. If you move out before the six months, you will be required to pay the subsidy back. Housing New Zealand Corporation administers the deposit subsidy on behalf of the Government and applications should be sent directly to Housing New Zealand. You can also apply for pre-approval. This happens if you have not found a house or land to build on, but want to find out if you are eligible before you start house/land hunting. Pre-approval expires 180 days after it has been granted.
KiwiSaver First-Home Withdrawal
After three years of membership of a KiwiSaver scheme or complying fund; members may be able to withdraw all, or part, of their savings, any employer contributions and all investment returns to put towards buying their first-home. Government contributions are not paid out in the savings withdrawal. This includes the $1,000 kick-start when you first join. Not all complying superannuation funds permit withdrawals for this purpose, so you will need to discuss this with the trustees of the complying fund you belong to. If you are a first-home buyer, please contact your KiwiSaver or complying fund provider to apply. If you are a previous home owner you will still need to apply through your scheme provider, however Housing New Zealand will need to determine whether you meet the eligibility criteria.
Previous home owners
Previous home owners may apply for both the deposit subsidy and the savings withdrawal. Housing New Zealand administers the deposit subsidy. If you are a previous home owner wanting the savings withdrawal you will still need to apply through your scheme provider, however Housing New Zealand will need to determine whether you meet the eligibility criteria below: • You have not received the first-home deposit subsidy and/or withdrawal before • You do not have realisable assets totalling more than 20 percent of the house price cap for the area you are buying in. See note 4 for price caps. Realisable assets are belongings that you can sell to help pay for your house. For example if you were buying a house in the $300,000 cap area, your realisable assets cannot be worth more than $60,000. Housing New Zealand considers the following to be realisable assets: – Money in bank accounts (including fixed and term deposits) – Shares, stocks and bonds – Investments in banks or financial institutions – Building society shares – Boat or caravan (if the value is over $5,000) – Other vehicles (such as classic motorbikes or cars – not being used as your usual method of transport) – Other assets valued over $5,000 – Money already paid to a real estate agent. • You meet the income cap (see note 14) and house price caps.
Regular minimum contributions
To be eligible for the deposit subsidy you must have contributed at least the minimum percentage of your total income to a KiwiSaver scheme, complying fund or exempt employer scheme for at least three years. (From 1 July 2007 to 31 March 2009 the minimum contribution was 4 percent of your income, 4 percent of minimum wage for non-earners or 4 percent of your yearly benefit for beneficiaries. From 1 April 2009, the minimum contribution was reduced to 2 percent of your income, 2 percent of minimum wage for non-earners or 2 percent of your yearly benefit for beneficiaries. From 1 April 2013, the minimum contribution was increased to 3 percent of your income, 3 percent of the minimum wage for non-earners or 3 percent of your yearly benefit for beneficiaries). The contribution periods may change. For example you may have been a paid employee for one year, and then selfemployed for two years. This is acceptable as long as you were contributing the minimum contribution during both those periods, and they both add up to at least three years. This three year period can be longer than a calendar period, but must add up to three years. You must include a full transactional statement of your contributions to KiwiSaver. Employed workers should preferably supply a print out statement from “My KiwiSaver” from www.kiwisaver.govt.nz (See Note 16 for more details). Selfemployed applicants should contact their KiwiSaver provider to obtain a detailed statement.
To be eligible for the KiwiSaver deposit subsidy, buyers must have a deposit that is equal to or in excess of 10% of the property purchase price. This can be made up from your KiwiSaver savings withdrawal, your KiwiSaver deposit subsidy approval/pre-approval amount, money in the bank or already paid to a real estate agent and an amount gifted by a family member, as verified by a gifting certificate.
Regular minimum contributions for nonearners and beneficiaries
Evidence of a regular savings habit KiwiSaver members who do not contribute regularly because they are not earning are eligible for the deposit subsidy if they meet the following minimum regular contribution requirements: Non-earners If you are a non-earner you must contribute at least the minimum percentage of the minimum wage to a KiwiSaver scheme, complying fund or exempt employer scheme for at least three years. (From 1 July 2007 to 31 March 2009 the minimum contribution was 4 percent of the minimum wage. From 1 April 2009, the minimum contribution was reduced to 2 percent of the minimum wage. From 1 April 2013 the minimum contribution was increased to 3 percent of the minimum wage). Beneficiaries If you are a beneficiary, you must contribute at least the minimum percent of your yearly benefit (before tax). (From 1 July 2007 to 31 March 2009 the minimum contribution was 4 percent of your yearly benefit. From 1 April 2009, the minimum contribution was reduced to 2 percent of your yearly benefit. From 1 April 2013 the minimum contribution was increased to 3 percent of your yearly benefit).
Type of property and land eligible for first-home deposit subsidy
There are four types of property and land ownership arrangements the deposit subsidy can be used to buy.
Fee simple: Owners of the land are entitled to unrestricted use of the land and may dispose of the land in any way they wish (subject to the relevant laws).
Stratum estate freehold and leasehold: Common type of ownership for apartments. An undivided portion of a larger property is owned collectively and a smaller portion (the apartment or unit) is owned exclusively.
Cross-lease (freehold and leasehold) : Ownership of the land is shared and each owner leases their house from the other landowners. The cross lease agreement outlines the rights and obligations of each owner.
Leasehold land: The owner of the land with a fee simple title enters into a legal agreement (lease) to transfer the right to use the land to another person for a certain amount of time. The lease will detail the conditions including payment of rent to the landowner and the lease may be registered against the land title.