First Home Buyers

Purchasing your first home can be a daunting exercise. Before you begin looking at properties you need to go through quite a rigorous financial process to work out what is going to be affordable, and what your deposit requirements are going to be.

The current-but subject to change-Loan to Value Ratio restrictions (“LVR”) require a 20 per cent deposit when purchasing a property to live in. In other words, you must provide a minimum of 20 per cent of the purchase price yourself, excluding any bank lending. Lower deposits are possible, so if you don’t have 20 per cent and you want to purchase a house, talk to your bank or broker early on.

Although some individuals can borrow from family, others must depend largely on personal savings. Our team can provide guidance on deposit requirements including using your KiwiSaver savings, applying for the First Home Grant from Kāinga Ora or the First Home Loan, and how to incorporate gifting from family or friends.

Once you’ve determined your available level of initial deposit, you can then start to calculate your borrowing limit, taking into consideration repayments, costs, property outgoings and rates. We’ll discuss with you any potential costs with the property that you may not have considered outside of the house price. This can include, for example, deferred maintenance, upcoming rate increases or body corporate fees which you should be factoring in.

As experienced property lawyers, we know being a first time home buyer can be tough. If you want to avoid wasting time and money when looking to buy your first home, a realistic understanding of both what is available and what you are able to purchase is vital.