FAQs

Typically, you will need at least 20% of the property’s value as a mortgage deposit. However, some mortgage lenders may offer loans with lower deposit requirements, particularly for first-time buyers.

Lower deposit home buyers are likely to have higher mortgage interest rates and fees compared to buyers who have a 20% deposit.

If you're eligible for a First Home Loan through Kāinga Ora, you could buy or build your first home for as little as 5% deposit.

If you’ve been in KiwiSaver for at least 3 years, you can also use KiwiSaver funds towards your deposit, and in some circumstances, part of your deposit could be money that's been gifted to you.

Like to know if you have a large enough deposit to get a mortgage? Contact our mortgage brokers - we’re here to help!

The First Home Loan is designed to help first home buyers who can afford to make regular mortgage repayments, but are having difficulty saving for a large deposit.

With a First Home Loan mortgage, you only need a 5% deposit to get a mortgage and buy your first home, rather than the standard 20%.

First Home Loans are only available through select banks and lenders (including many of the lenders we work with) and are underwritten by Kāinga Ora. Some banks and lenders may also allow you to buy vacant land and build a new home with a First Home Loan.

There is specific eligibility criteria you will need to meet to qualify for a First Home Loan, and there are also some additional fees/costs associated with a First Home Loan. Contact our mortgage broker Craig if you’d like to find out more, or if you’d like to get the ball rolling on home ownership!

A fixed-rate mortgage locks in your interest rate for a set term (often 6 months to 5 years) which gives you predictability/certainty with your budget, but you won't benefit if interest rates fall during your fixed term, and you'll face potentially large break fees if you end the loan early (e.g: if you sell your home or refinance).

Floating (or Variable) rates can change at any time, the interest rates are usually higher than fixed rates, and your repayments can go up if the interest rates rise. But on the plus side, a floating/variable rate mortgage normally allows you to make extra repayments whenever you like or pay off the loan early without any penalties.

Many borrowers choose a split mortgage, fixing part of the loan for stability and keeping part floating for flexibility.

Click here for more advice from our mortgage broker on which interest rate type is best for you.

A mortgage pre-approval is a written indication from a lender of how much they are willing to lend you based on your financial situation.

Think of it as an early green light showing how much you could borrow, and on what terms.

A mortgage pre-approval is important for a few reasons:

• It gives you a clear idea of your budget.

• It can make you a more attractive buyer, strengthening your position/credibility with real estate agents and sellers and allowing you to negotiate with confidence

• Having a pre-approval can speed up the final mortgage approval process

Want to get a pre-approval? Contact our mortgage brokers - that's what we do best!

When you make an offer on a property (using a standard Sale and Purchase Agreement), you can make that offer 'conditional' - that is, your offer includes conditions that must be met before the sale becomes unconditional. These conditions give you time to confirm the property is right for you.

The main conditions here in New Zealand include:

• Securing finance

• Getting a satisfactory building inspection/builder’s report
  (Obtaining a pre-purchase builder's report to identify outstanding maintenance issues that will likely cost money. Make sure you also obtain a quote for what it costs to fix those issues! You can then go back and renegotiate the purchase price.)

• Reviewing the LIM report
  The LIM (Land Information Memorandum) is a report available from your local council that provides general information about the land and surrounding areas

• Checking the property’s title

• Obtaining a valuation

• Selling your current home
  ‘Subject to Sale’ - include this if the property purchase will only be possible once your own home has been sold.

• Drug Test
  To make sure the house doesn’t have any poisonous residues and that it is going to be safe.

• Completing broader due diligence.

Deadlines are crucial when putting in a conditional offer - the conditions must usually be satisfied (or waived) within a set number of working days.

Keep in mind that if you’re buying at an auction, your offer must be Unconditional on auction day - so all your checks and finance need to be sorted beforehand.

Bridging finance is used when you are in the process of selling your house and purchasing another, and have a temporary need for additional finance (an additional mortgage, essentially) - usually because the settlement dates are different to each other (i.e: you're buying a house before your current one sells).

There are two types of Bridging Finance:

Closed Bridging Finance - This is when you are selling your house, and have an unconditional offer on the property - the sale is definitely going through. In this situation, banks are not too worried about meeting normal mortgage affordability criteria, provided the settlement dates are not too far away from each other.

Open Bridging Finance - This is when you are selling your house, but don’t yet have an unconditional offer on your property. In this situation, you do need to have an affordability assessment to make sure you can manage both your existing home loan and the proposed new mortgage repayments.

Need bridging finance? Contact our mortgage brokers - we can help!

The settlement date is the day the property officially changes hands.

On this date, your lawyer transfers the purchase price to the seller’s lawyer, the title for the property is updated into your name, and you get the keys.

The settlement date is usually agreed to when you sign the Sale and Purchase Agreement and often falls a few weeks after the agreement goes unconditional, giving both parties time to prepare for the move and finalise paperwork.

LVR is the percentage of the property’s value you’re borrowing.

Here’s a simple formula:
LVR = (Loan amount ÷ Property value) x 100

For example, if you are borrowing $400,000 on a home valued at $500,000 home, this is an 80% LVR. (Because $400,000 is 80% of $500,000)

Owner-occupiers, including many first-home buyers, can generally borrow up to 80% of the property value, but some banks/lenders allow higher LVRs (like 85%, 90% or even 95%) for eligible buyers under initiatives such as First Home Loans.

Investors face stricter limits, often needing at least a 35% deposit (an LVR of 65% or less) which reflects the higher risk associated with investment properties.

LVR limits aren’t set in stone; they’re reviewed regularly by the Reserve Bank and can shift in response to market conditions or economic factors.