Simply put, banks won’t finance the entire amount for a house purchase - you’ll need to come up with a deposit, and the larger the better. While 20% is often seen as the magic number, the truth is, if you’re in good financial shape, we can work with deposits as low as 5%. Most folks aim for at least 10%, but if you can manage to round up 20% you'll get the banks' best rates and dodge low equity fees.

Here are a couple of things that could help you get your deposit together: ‍

‍Kiwi Saver

If you're buying your first home, you can tap into your KiwiSaver contributions from both you and your employer to help with your deposit, provided you meet these requirements:

• You've been a member of the KiwiSaver scheme for a minimum of three years.
• You intend to reside in the house for at least six months.
• This is your first home purchase

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The Bank of Mum and Dad

If this is an option for your family, the easiest and most cost-effective way to purchase a home is by getting your parents to guarantee a portion of your 20% deposit that you're missing.

They can secure their share against their property or put it in a term deposit. So, it’s not like they're giving you cash upfront; it's more like putting a 'hold' on their existing equity until you pay that part back.

If they use a term deposit as security, it stays in their name, and they keep earning interest on it. Plus, guaranteed home loans are treated like loans under 80%, which means you get great interest rates, no fees, and even some cash from the bank. On an average loan of $400,000, you could save roughly $10,000 with this option.

Using a guarantor makes a lot of financial sense, even if you could manage to buy on your own. But remember, you still need to prove you can afford the whole loan, including the part your parents are guaranteeing.‍

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Questions? ‍

Talk to our friendly team about how we can help. 

Call us on 0800 BUDDY M (0800 283 396) or click here to book an appointment. ‍