First home buyers: What kind of financial help can I get?

Being a first home buyer can be equal parts exciting and challenging. While prices are coming down slightly compared to last year’s, house prices are still steep. The good news is, that there is help available. From saving a lower deposit to cash bonuses, we’ve rounded out the best financial incentives for first-home buyers in New Zealand.

Cash incentives for first home buyers from the banks

Some banks are offering cash incentives for first home buyers. While their offers are pretty low, every dollar can help in this economy. Most of the major banks are offering a minimum $3,000 contribution towards your mortgage as of June 2022, however, these incentives are constantly changing.

ANZ

are offering a $3,000 cash contribution for first home buyers as long as you keep your loan with them for the next three years.

BNZ

are offering varying cash incentives for first home buyers, dependent on the total amount loaned. They are also giving away the chance to win a share of $200,000 in $10,000 increments for taking out a home loan before 31 July 2022.

BNZ also has a KiwiSaver Scheme designed for first home buyers. Payment into the scheme for three or more years could make you eligible for the Kāinga Ora First Home Grant of up to $2,000 for every year you’ve contributed, capped at $10,000 in total for new builds.

Westpac

are offering first home buyer loan applicants the chance to one of five prizes of $50,000, for loans drawn down between 6 June and 30 September 2022.

They are offering First Home Loan with Kāinga Ora. While these loans aren’t exclusive to Westpac, you will only need a 5% deposit. However, terms and conditions are attached, like meeting the household income caps and buying under the house price caps.

SBS

have a competitive home loan package for first home buyers. Not only will you have access to super low-interest rates (2.99% fixed), but SBS will contribute $2,000 to cover home-related costs, like lawyer fees. Plus, you’ll also get $1,000 towards your first year of Home and Contents Insurance, an interest-free 24 months credit card, and $1,000 to put back into your Kiwisaver.

The Co-operative Bank

are offering $3,000 cash back on home loans over $250,000.

Government help through Kainga Ora

First Home Grant

The First Home Grant is a $10,000 top up to help towards your home deposit. To be eligible you must have contributed to your Kiwisaver for more than three years.

• If you’re looking to buy an existing home, you can apply for $1,000 for each of the 3 (or more) years you’ve paid into the scheme. The grant is capped at $5,000.
• If you buy a new home or land to build on, you can get $2,000 for each of the 3 (or more) years you’ve paid into the scheme. The grant is capped at $10,000.

As well as Kiwisaver requirements, to be eligible you must:

• be older than 18
• earn $95,000 or less before tax for an individual and $150,000 or less before tax for two or more buyers
• not own any property, (not including ownership of Māori land)
• purchase a property within the regional house price caps
• live in your new house for at least 6 months.
• Prove that you have a 5% deposit saved or available

First Home Loan

A first home loan lowers the required deposit to 5%, which can help you get into your home faster. First home loans are underwritten by Kāinga Ora and issued by selected banks and lenders (like Westpac). To be eligible you need to meet certain criteria including:

• Earn less than $95,000 (before tax) for an individual and $150,000 (before tax) for an individual with dependents or for two or more buyers (regardless of the number of dependents.)
• Have a minimum 5% of the purchase price of the home you are wishing to buy.
• Be a first home buyer, or a previous homeowner in a similar financial position
• You also need to meet the criteria of your bank
• Cannot own any other property
• Need to pay Lender’s Mortgage Insurance
• Must be a New Zealand citizen
• Be over 18 years of age
• Live in the home you are buying

First Home Partner

If your deposit and home loan aren’t enough to buy a house, the First Home Partner can help bridge the gap. This shared ownership scheme means that you’ll initially share ownership with Kāinga Ora and buy them out over time. How much you own will depend on:

• How big your deposit is
• How much your lender is willing to let you borrow
• How much contribution Kāinga Ora make towards the remainder of the loan. However, the maximum contribution Kāinga Ora will make is 25% or $200,000 – whichever is lower.

There are eligibility criteria as well. To be approved as a First Home Partner, you must:

• be older than 18
• be a New Zealand citizen, permanent resident, or a resident visa holder and be in New Zealand”, or be applying as a partner of someone who meets these criteria
• earn a combined income of no more than $130,000
• have a good credit rating (subject to a credit report)
• be a first home buyer
• not previously received shared ownership support from Kāinga Ora
• commit to living in the home for three years

Buying off the plans

While not a financial bonus, many developers only require a 10% deposit to buy a home off the plans. There are upsides and downsides to this approach. First of all, your deposit is lower which makes it easier to save for. You can also lock in the price of your home and may benefit from rising values while you wait for your home to be built.

On the downside, you won’t get pre-approved for a mortgage since it can take between 12 and 24 months for your home to be built. While unlikely, you may risk not being able to finance your home if lending criteria changes again.

Ready To Get Started?

Bank loan criteria and cash back incentives are changing all the time. For the up to date advice on financial products for first home buyers, contact the team at Ingerson, and we’ll help you get the right home loan assistance for your needs.

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