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So you don't quite have a 20% deposit?

By Jeff Kerwin - NZ's Top 10 NZ Mortgage Adviser 2017
Photo of Jeff from Nest Home Loans

Solution 1: The Welcome Home Loan
The Welcome Home Loan is a government backed mortgage that allows you to get 90% lending and it is exempt from the Reserve Bank restrictions. So you only need a 10% deposit, and the 10% can come from a number of sources:

· Savings. You can save all of the 10% deposit.
· Kiwisaver. You can withdraw your Kiwisaver.
· Housing NZ first home buyers subsidy. You can obtain up to a $5,000 grant for existing houses if you use your Kiwisaver. If you and your partner both use your Kiwsavers then you may receive up to $10,000 ($5,000 each).
· Gifts. You may have family who can gift you some money.

Solution 2: The bank of Mum and Dad
Members of your family can gift you money or they may own their own home and have equity that could help you with your deposit.

· Guarantees. A family member can guarantee a portion of your deposit by offering some of their equity to the bank as extra security. Those family members need to agree that they will be responsible for some of your loan if you're not able to pay it for any reason.

Solution 3: Low Deposit Loans
It may be possible to buy your home with a deposit as low as 5%!
The Reserve Bank restrictions still allows a portion of low deposit loans to go through, and we have lots of options with other lenders like credit unions who are able to lend. If you buy a brand new house it is exempt from the restrictions, and you may also only need a 5% deposit! There are many criteria so its best to get advise on this before you charge off and make offers on new houses. Nest Home Loans can point you in the right direction and guide you through this.

Solution 4: 2nd mortgages are the new fashion
If you still have some debt to tidy up a second loan might help to get you into a house. A 2nd mortgage is a small loan that follows the 1st mortgage. For example, if we have 10% deposit, we could 'borrow' the rest need to make up a 20% deposit. Its worth noting you will pay slightly higher interest rates, but you are often better off if we are clearing other debt and we can structure the mortgage so your overall weekly payments are about the same as you would pay for a mortgage with a bank. 2nd mortgages are only a short term solution, after 1-2 years or when there is 20% equity we refinance you over to a mainstream bank and get you sharp rates. Rather clever don't you think?