Getting your deposit together

The first step is to figure out how much you can borrow.

You can work out your price range by looking closely at your finances. In general you don’t want your mortgage repayments to eat up too much of your gross income. This ensures that you have enough money left over to cover any surprise expenses, but can still cover your repayments if the interest rate increases or your income is reduced.

So, work backwards by looking at your income, expenses, and existing debt to calculate an affordable repayment amount. You can then put this amount into our borrowing calculator to see how much you can borrow.

If this amount isn’t as high as you’d like, don’t stress! By reducing your debt and making a budget, you could be able to get a higher home loan amount.

Once you have figured out how much you can borrow, it’s time to get saving for your deposit. Minimum house deposits in NZ are generally 20% of the purchase price. However, if you’ve saved a small deposit and it’s over 5% of the price of the property you’re wanting to purchase, check out the Kāinga Ora First Home Loan and low deposit home loans information below.

We’ve got some simple ways to make it easier to save for your first home (and be landlord free).

Set a goal

Be clear about how much you need to save for your deposit. This is the golden number you’re working towards, and keeping your eye on the prize will make it easier to create your budget.

Make a budget

The next step is to create a budget. Either jot down your income and expenses on paper, or use an online budgeting tool. This will show you how much money you have left after your expenses are paid. Every little bit helps, so it’s good to see where your money is going and how many takeaway coffees you’re really buying! Then you can work out any unnecessary spending you can cut back on.

Get saving

How much you decide to save from each paycheck depends on your budget and circumstances. Try to save as much as you can, but be realistic. Not having any money left over to spend on the odd treat (like those new shoes) can be discouraging and could put you off.

Open a dedicated savings account

Savings accounts are a really easy way to keep you on track with your deposit and deter you from spending what you have worked so hard to save. With our saving accounts you can also set saving goals so you can see just how close you are getting to your new home.

One way to reach your deposit goal faster is to use KiwiSaver. If you’ve been contributing to KiwiSaver for at least three years, you can dip into the funds and add to your deposit. Terms and conditions do apply, like leaving $1,000 in your account and that you’re intending to live at the property. For more information, see the Kāinga Ora website.

That means you won’t be able to use KiwiSaver funds to pay the deposit straight away on an unconditional offer or at an auction. In those cases, your KiwiSaver funds will be withdrawn closer to the settlement date to go towards the purchase price. If you make a conditional offer on a house, you could withdraw the funds once you have a sale and purchase agreement, and arrange for them to go towards the deposit once received.

Either way, the funds are transferred from your KiwiSaver account straight to your lawyer or conveyancer who will make the payment – easy as!

When you’re ready to make a KiwiSaver withdrawal for your first home, contact your scheme provider to get a withdrawal form.

With a Kāinga Ora First Home Loan , your dream of owning your first home could be closer than you think. as you only need a 5% deposit.

We are a Kāinga Ora First Home Loan approved lending partner, which allows us to provide loans that could otherwise sit outside our lending criteria. Whilst Kāinga Ora sets the eligibility criteria for Kāinga Ora First Home Loan, we assess the applications, and make the final lending decision.

You can call our Contact Centre on 0800 554 554 and speak to a Home Lending Specialist, schedule an in-person or phone appointment with your closest branch, or work directly with one of our Mobile Mortgage Managers.

We also work closely with mortgage brokers throughout the country. If you are already working with a broker, you can ask them to include The Co‑operative Bank as a potential lender.

Minimum house deposits in NZ are generally 20% of the purchase price. However, if you’ve saved a small deposit and it’s over 5% of the price of the property you’re wanting to purchase, we may be able to help. Get in touch with one of our Home Loan experts to discuss our low deposit home loans in New Zealand.

Our team has helped many of our customers get into their first home and are experienced with the ins and outs of homeownership. We’ll work with you to make sure you’ve got Home Loan options that will work hard for you.

When you start saving for a deposit, you also need to work out your current levels of debt. It’s best to do this before you apply for mortgage pre-approval, as debt can impact the amount a lender is willing to loan you.

When lenders see that you have debt repayments to make, it means less of your overall income is available to pay off your mortgage. This might mean they offer you a smaller mortgage or may turn you down depending on how much debt you have.

Here’s some things you can do now to start reducing your debt and work towards getting into your first home:

• Start paying off debts with high interest rates first, as these will likely have the highest repayments.
• If you have multiple loans, consider consolidating your debt so it’s all in one place.

At the end of the day, having debt like credit cards or student loans doesn’t stop you getting a home loan, you just have to make sure you have enough income left over to manage your mortgage repayments. For personalised advice, get in touch with our home loan experts today.