Buying your first home should be easy, even if you’ve got less than 20% deposit, right?

We know saving a 20% deposit is a big hurdle which can take a lot of time. But you can get started with a 5% deposit or with the help of a guarantor so long as you can demonstrate good behaviour and your loan repayments are affordable. Scroll down for more information

What is ‘good behaviour’?

• Excellent bank account conduct – no dishonours, no missed payments, no unauthorised overdraft.
• You’ve physically saved a 5% deposit
• You have stable income and steady employment history
• An accurate statement of your financial position ideally with minimal existing debt
• A clean credit check
• And be a New Zealand citizen or have permanent residency.

You’ll need a strong income to qualify because lenders want to make sure you have a large surplus after making loan repayments and paying your living costs. Try our mortgage calculator to see if your numbers work out.

Another option is to use a guarantor for your home loan
It’s usually parents who provide this kind of assistance so that children can get into their first home. In this scenario it is possible to get away with zero cash deposit. It works like this
Let’s say you want to buy a house for $300,000 and your parents have a house worth $650,000.

Your parents give the bank a guarantee which is backed up by the equity in their house to act as a 20% deposit for your new house. In this example, the guarantee would be for $60,000 and note, no cash was used, no deposit was saved. This means the kids’ mortgage broker will arrange a loan for the entire purchase price of $300,000.

To discuss either option please contact us.