First Home Loan

If someone was to say to you First Home Loan, you would likely think that person was preparing themselves to buy their first home. And you’re right but it also happens to be the name of the NZ Ministry of Housing (Kāinga Ora) scheme offers to make it easier for Kiwis to purchase their first home.  Easier in that you only need a 5% deposit (not the normal 10-20% required by most other lenders) which means getting into your first home can happen quicker. 

First Home Loans are issued by selected banks and other lenders, and underwritten by Kāinga Ora. This allows the lender to provide loans that would otherwise sit outside their lending standards.

Essentially, this is a low deposit home loan can only be used to purchase owner occupied property, which means you must live in the house you buy.

What You Need To Apply For Your First Home Loan

  • ID
  • Proof of Income and Kiwisaver Contributions
  • Kāinga Ora’s Eligibility Criteria 
  • Bank’s Lending Criteria 
    • Application Form
    • Income Documents 
    • Bank Statements

Mortgage Brokers vs Banks

  1. A good broker works with the lenders to build a good relationship with the bank for you. We see it as our role to act as your advocate, and negotiate on your behalf, saving you the hassle. 
  2. We help assess all your options, the Bank is restricted to one lending policy and their loan products so work the best way to present your finances
  3. We know the interest rates and application criteria for different lenders, ensuring you not only secure the loan but receive the best deal 
  4. We make it easy for you to apply for a loan, and you also only need to apply once . Our job does not finish when your loan settles, we regularly contact you and review your situation to ensure your loan still meets your needs.
  5. All mortgage brokers are required to be Registered Financial Advisers. Using a mortgage broker who is experienced and knowledgeable can assist you with loan structuring, borrowing capacity and fitting the bank’s lending criteria.

Required Deposit Amounts For Home Loans

5% Desposit – First Home Loan underwritten by Kāinga Ora 

Not all banks are willing to lend to people with 5% deposits and even then of the banks that will normally look at applications with 5% deposits some can vary from day to day.

Typically we find that the following lenders will consider applications with 5% deposits. 

  • Westpac
  • TSB
  • Kiwibank
  • NZCU Employees
  • NZCU Baywide
  • The Co-Op Bank
  • SBS Bank
  • NBS
  • NZHL

10% Deposit – Your First Home Purchase Loan 

The banks will generally require a minimum 10% deposit, meaning you could borrow up to 90% of the property value. This is often referred to as the loan to value ratio (LVR), for example at 90% LVR – would mean that the borrower contributes the other 10%.

With High LVR loans, there is more difficult credit criteria to meet due to a limited number of loans available. The Reserve Bank of New Zealand regulations allow for only 20% of a lender’s home loan customers to have an LVR of over 80%. Lenders are selective with the loans they approve. With unique lending policies for each lender along with a range of loan options available to you, a mortgage broker can assist with this unique loan application process. 

Generally standard interest rates and additional fees are required to be paid also