Deposit requirements vary between lenders and are based on criteria that can change over time. 20% deposit of the purchase price will be acceptable by most lenders. There are lenders that lend with deposits as low as 10% and even sometimes lower.
Lenders will often require that the deposit can be demonstrated with a minimum of 3-months savings history in either a bank account or investment including KiwiSaver.
First home buyers with KiwiSaver for at least 3 years may be eligible to withdraw from their KiwiSaver account and may also be eligible to have government subsidy from Housing New Zealand. Previous home buyers may also be eligible to withdraw from their KiwiSaver and a deposit subsidy but must first apply for approval. (See Welcome Home Loan and KiwiSaver)
A guarantor can offer security for the portion over 80% of the purchase price. Guarantors should be close family and be in a strong financial position. They would need to seek independent legal advice before agreeing to act as a guarantor.
Family Equity Assistance
The purchaser borrows 80% of the purchase price in their name, and the remaining 20% is borrowed as a joint equity loan with a surety – usually their parents. The purchaser must be able to repay the total loan as a whole. The 20% joint equity loan is secured against both the purchased property and the surety’s property. The liability of the family is limited to the amount of the equity loan.
Top-Up Loan for Renovation
Renovation includes the do-up on new kitchen, bathroom, new carpet, or new rooms. If you have repaid your loan to a certain percentage, normally you can get some of the amount back from your lender to make renovations, which is a great way to increase the value of your property. A top-up from your mortgage is an easy way to fund the renovations. For big amount top-up, a renovation proposal may be required. If a structural reform is made, a permit from city council is usually needed.
A large proportion of wealth for NZ households is in the form of housing. Property investment is one of the main ways to increase your family wealth. It can also be an excellent superannuation scheme in the right circumstances. A property investment loan can be approved just on the equity amount of your property, even if there is no any deposit.
An Investment Property Loan is a loan provided for the purchase of, and / or secured by, residential investment property. Residential investment property is property that is not owner-occupied, or for the owners’ exclusive use (such as a holiday house)
Investment property loans are not available for
- Any type of residential construction or development where repayment in part or whole is reliant on the successful completion and sell down of the property asset(s)
- Commercial property development or specialist use properties
- Illegal purposes
- Payment of tax liabilities or legal expense