A Helping Hand for First-Home Buyers / Advice from Mortgage Adviser Nathan Miglani
Mortgage Adviser Nathan Miglani offers some advice when it comes to financing your dream home.
In recent years, the government has introduced several schemes to help first-home buyers onto the property ladder. These tools have been influential in making first-home buyers some of the most active buyers in the current market – a big turnaround from pre2015, when a lot of first-home buyers felt shut out of the housing market. On 1 October this year, changes came into effect to make these schemes even more attractive – and buying your first home even easier!
The first scheme to know about is the KiwiSaver first-home withdrawal. If you’ve been in KiwiSaver for at least three years, you may be able to withdraw your savings for buying your first home. At least 1,000 must stay in your KiwiSaver account and not all funds let you do this, so talk to your mortgage adviser before you go making any offers! One of the great things about this scheme is that there’s no house price cap – i.e. it doesn’t matter how much the house costs.
The First Home Grant (which used to be the HomeStart Grant) is a great boost for those who qualify. If you’ve been making regular KiwiSaver contributions for at least three years, you may be eligible for a grant of up to $ 10,000. The First Home Loan (formerly Welcome Home Loan) is a special type of loan available from some banks. They’re underwritten by Housing New Zealand, which means they don’t have to follow the usual restrictions. There are income and house price caps for both schemes, but if you qualify then you’ll only need to pay a 5 per cent deposit (reduced from 10 per cent on 1 October).
The government also works closely with property developers to build affordable homes for eligible buyers with KiwiBuild. There are income limits and you must be intending to live in the home, but it can be a way of purchasing a high-quality home at a great price.
The changes that came into effect on 1 October, together with record-low interest rates and good-value property for sale, have really lifted the spring property market here in Christchurch. In my office, most of the first-home buyers we work with are using one or more of the schemes. We recently helped a young couple with six children using the HomeStart Grant for their deposit. Other recent deals include helping young couples build brandnew first homes in Karamu (Upper Riccarton) and Prestons, both with just 5 per cent deposit. We are also excited about getting our first KiwiBuild property across the line – a brand-new home in Prestons for under $ 459,000.
As a rough guide, for a $ 400,000 property purchased with a 10 per cent deposit, weekly repayments will be around $ 400 per week on current interest rates. It’s important to talk to a mortgage adviser who has access to all the banks, however, because when you’ve got a smaller deposit, the terms are different at every bank. I have an experienced team of mortgage brokers across the city and Selwyn, so give me a call on 0800 100 300 to get started with buying your first home!