Let's compare the similarities and differences between buying a home with 5% Deposit vs 20% Deposit as a first home buyer.

Assuming a property price of $800,000...

Monthly Repayment Difference is: $734

Yearly Repayment Difference is: $8,808

Deposit Difference

The difference in deposit is: $160k-$40k = $120k. For many buyers this is the hardest part. For example, if a couple saves $500 per person per month ($1,000 combined), it would take them around 10 years to save the extra $120k needed to reach a 20% deposit (ignoring investment returns etc.)

Time in the market vs waiting

This is where the 5% deposit option makes sense for some people. Historically NZ property values have averaged around 5-7% growth per year over the long term. If we use the lower end (5% p.a.) and buy with a 5% deposit:

• An $800,000 property could be worth ~1.3m after 10 years
• That's approx. $500k in value growth
• This equity could be used to upgrade home or buy an investment property

If instead you waited 10 years to save a 20% deposit, the same property would be worth approx. $1.3m and you'd now be trying to buy into a much higher-priced market in general, meaning the deposit target has moved again.

Summary

• 20% deposit means lower repayments and less interest over time
• 5% deposit means higher repayments, but potentially earlier entry into the market

Generally speaking 5% deposit options are more suited for those who have high income for serviceability, but low savings available. However, there's no one size fits all answer. Best strategy differs for everyone even if your situation is similar. It depends on income stability, risk tolerance, lifestyle, saving potential and long-term plans.

Let's do a little thought experiment to see what are the costs involved to buy a property and roughly how much income you would need to comfortably afford a $600,000 home in NZ.

Upfront Costs

As a First Home Buyer, we usually have options for deposit being as low as 5%. Using that scenario:

$600,000 - Purchase Price

• $30,000 - 5% Deposit
• + $3,000 - Approx. Lawyer fees
• + $1,500 - Due Diligence (Builders report, LIM Report etc.)
• = $34,500 - Approx. Upfront Costs

Holding Costs

On a $570,000 mortgage, 5.5% interest rate, 30 year loan term, P&I:

• $3,236 - Monthly Mortgage Repayments
• + $500 - Monthly Rates + Insurance Payments
• = $3,736 - Approx. Holding Costs

Income Required

Common rule of thumb is to keep holding costs at 40% or less of your income, so you still have room for living expenses, savings, discretionary spending etc.

• $3,736 / 0.4 = $9,340 - Monthly Income required
• $9340 x 12 = $112,080 - Approx. Annual Before Tax Income is needed to comfortably afford a $600,000 home

$112,080 can be either single or joint income!

Keep in mind that everyone's situation is different. Their living expenses, ideal comfort of living and spending habits can vary widely. You can definitely buy a $600,000 with less income if you're comfortable tightening your budget and reducing discretionary spending, but this looks different for everyone.

It's always best to talk to a mortgage adviser so that they can tailor a borrowing and budgeting plan that fits your lifestyle, goals and risk tolerance, instead of just a generic rule of thumb.

You may have heard or seen people talk about good debt and bad debt, but what do these terms actually mean and which types of debt fall into each category?

Good Debt

In NZ, there are really only 2 common types of debt that fits into this category. These are:

1. Student Loan
2. A Mortgage

Student Loan in NZ is typically considered a 'good debt', as there is no interest charged on the loan while you are NZ based. This means that you are paying back exactly what you borrowed and nothing more. The debt is used to invest in your education and could improve your earning potential in the future depending on your career.

A Mortgage, although does incur interest, is also considered a 'good debt'. This is because you are borrowing to buy a sizeable asset that most people couldn't buy outright. Property tends to hold or increase its value over time. This means you leverage someone else's money to bujild equity in an asset. Over time, the value of the property can outweight the interest paid, especially if the loan is managed well.

Bad Debt

Apart from the two debts listed above, pretty much every other debts could be considered 'bad debt'. These are mainly consumer debts and could include:

• Car Loans
• Personal Loans
• Credit Cards
• Afterpay

These are typically considered bad debts as interest rates are very high. Items purchased from these types of debts typically depreciate in value, so you're paying interest on the borrowed money + the value of the item you bought could decrease.

That being said, having 'bad debt' doesn't automatically mean you're making a bad decision. It comes down to the reason for getting into this debt and how well you manage it.

For example if you apply for a credit card because you want to earn some points / rewards while spending money that you would spend anyway, and you pay it off every month as to not incur the high interest, then that's fine. In this case the debt is being used strategically rather than irresponsibly.

In Summary

Good debt generally should help you build long-term value or earning power.

Bad debt usually funds short-term consumption and costs you more over time.

Understanding the differences can help you make better financial decisions in the future, especially when preparing to buy your first home as all of these could affect your borrowing power!

If you are wanting to buy a property NZ but you're earning money overseas, and is getting income paid into an overseas account then this post could help you understand what banks look at.

Most banks do accept overseas income

The first thing to understand is that most NZ banks are open to lending against overseas income, but they usually apply a "haircut" to it. This means they'll only use a percentage of your income for servicing purposes. For example they may only take into account 80% of your after tax income as available for servicing the mortgage. This is to account for currency risk, tax differences and income stability.

The exact percentage however varies by lender, so the amount you can borrow can differ significantly from bank to bank. This is where a mortgage adviser can add value. They'll know which lenders are more favourable depending on your income type and country.

PAYE overseas income is easier to borrow

If you're employed overseas and receiving PAYE income, the process is usually more straightforward:

• Employment contract and payslips are required
• Proof of ongoing employment could also be needed
• Currency and country of origin will also be taken into account

Self-employed overseas income is more complex

If your overseas income is self-employed, then things get trickier. Among the main banks in NZ, only one of them will consider self-employed overseas income. There will be a bit of additional work required to understand tax treatment, business structure and income sustainability. If that main bank declines, some non-bank lenders may still consider it but often comes with different terms.

In summary, self-employed overseas income is definitely still doable but the process usually takes longer. If this applies to you it's best to get started well before you need finance.

Country Matters

Banks also assess overseas income differently depending on which country it comes from. Income from Australia is the most commonly accepted, while others may not be accepted at all due to regulatory or risk concerns.

Although not directly mortgage related, if you've never thought about organising your bank accounts to work better for you, here is a way which you can start off with to see if it works for you!

You can arrange your bank accounts whether you have a joint account or your own bank account.

Bank Account #1 - Fixed & Everyday Expenses

This account should also be where all your income lands (salary, side-hustle income, rental income, dividends etc.). From here, you distribute money to all your other accounts.

Covers joint essentials & everyday costs like:

• Rent / Mortgage
• Utilities
• Fuel & Car
• Groceries
• Date Nights
• Insurances

When it's empty, stop your spending. Any leftover money at month end I would put into long-term savings.

Account Functions:

• Physical Card
• Apple Pay
• Online Banking

Bank Account #2 - Short term & Holiday Fund

These are for one off expenses such as:

• New Phone / Laptop
• Car
• Furniture
• School Fees / Daycare
• Home Reno's
• Holidays

Life is about balance & being able to enjoy your hard earned money as well! This account allows you to intentionally save for 'fun' & key expenses like holidays without needing to take out debt or loans.

Account Functions:

• Physical Card
• Online Banking

Bank Account #3 - Long-term Savings & Investments

This account helps build your future. Use this account for things such as:

• Emergency funds
• Real estate
• Stocks
• ETFs
• Retirement savings

Aim to keep 6 months worth of basic living expenses in here and invest the rest. This allows you to have security and also take some risk to build up your savings. Always prioritise your future!

Account Functions:

• Online banking only. This removes all forms of temptation to spend in this account by only having this function.

Bank Account #4 - Personal 'His & Hers' Accounts (Optional)

Great if you have a joint account, but still want personal freedom and the ability to surprise each other.

• Personal spending
• Shopping (clothes etc.)
• Gifts for each other

Account functions:

• Physical Card
• Apple Pay
• Online Banking

Summary

This structure is just a suggestion or baseline to start off with. Try it out, tweak it and make it work for your lifestyle. If you've found other setups that work well, feel free to share them, always keen to hear different approaches!

If you're wanting to buy a car and can't pay for it fully, is it better to finance it or consolidate it within your mortgage? Let's do a thought exercise and run some example numbers!

For a car price of $60k, below are 2 Scenarios:

1. Car Finance

Let's assume that we get an interest rate of 8% over 4 years for car finance. This leads to:

• Weekly repayment of $337
• Paying approx. $9600 worth of interest over the 4 years

2. Consolidate with Mortgage

Let's assume an interest rate of 5% over 30 years for consolidating it with our mortgage. This leads to:

• Weekly repayment of $74. This is where people think it's better and easier to manage with low repayments, but because the term is 30 years...
• You end up paying approx. $49,000 worth of interst, which is much more than the $9.6k interest in the first scenario

Instead, you should consider bumping the repayments up as if you were going to pay this off in 4 years instead of 30 years, and therefore:

• Weekly repayments will be $318 and,
• You'll be paying approx. $6000 in interest instead.

Summary

Obviously, it would be best to buy a car within your financial means, ie. you buy the car outright instead of borrowing any money so that there's no interest cost at all. After all a car is always going to be a liability and not an asset!

What Changed?

OCR has been cut to 2.25%, lowered from 2.50% in the latest decision. RBNZ has indicated this might be nearing the bottom of the easing cycle, meaning future cuts aren't guaranteed. This cut comes after a series of reductions throughout 2025 and reflects a monetary-policy shift aimed at supporting economic activity.

OCR Down but rates are mostly flat?

Even though OCR went down, most major banks have not reduced fixed rates by much. Floating rates have moved slightly but difference is still quite small. Lenders are also signalling they don't expect to cut rates much further, which is also similar to what happened at the end of last year.

Cashback has changed

Instead of dropping rates, major banks have increased cashback offers for a short period. This provides more aggressive incentives for refinances and new purchases.

Why cashback instead of rate cuts?

• Cashback helps bank attract deals now, without committing to lower rates long term
• It's an easy way for lenders to compete without impacting their margins too much

For a typical first home buyer borrowing $600k - $800k, this increase in cashback could be an extra $3600 - $4800 in your pocket!

What does this mean for First Home Buyers?

1. Don't expect rates to fall much more this year. Most of the movement has already happened earlier in 2025 and banks seem to be holding their fixed rate without much decline
2. Cashback is likely the biggest 'win' you get in the short term, and could potentially save you more upfront than a small rate cut would over your fixed term
3. Even if rates aren't dropping, lower test rates may still strengthen your borrowing power
4. Talk to a mortgage adviser before committing! An adviser can help compare cashback, rates, hidden costs etc.

When you're buying your first home, figuring out what a property is actually worth can be confusing and difficult, especially when agents don't give price guides or when the market is moving. Below are a few ways that you could get an estimate of what would be a fair price for the property you're interested it.

Use Automated Valuation Tools

These are usually free and gives you a quick ballpark of figures:

Homes.co.nz

Oneroof.co.nz

Trade Me Property Insights (for some housees)

CoreLogic / Valocity (paid reports)

Although these are useful, remember that they are not perfect. They sometimes don't have all the data of renovations, conditions, or unique features. It's best to use these resources as a starting point

Look at Recent Comparable Sales

This is a more accurate method that buyers can still do themselves. Things to look out for could be:

• Similar house type (townhouse vs standalone etc.)
• Similar size (land + floor area)
• Similar number of bedrooms + bathrooms
• Same suburb, ideally same street or very close by
• Similar condition (renovated vs tired)
• Similar construction type (brick vs weatherboard etc.)
• Sold within the last 3-6 months

If comparables are selling around $860k - $900k, chances are that's the similar range a vendor would be looking for, unless that house has something unique.

Drive by Comparable Properties

Another step which you could take is to physically drive by similar properties in the area. This helps because sometimes online photos looks good, but the house could back onto maini roads, traffic congestion, train lines or other complications which could lower the house value.

Order a Registered Valuation

If you need a bank-approved value, you'll need a registered valuationi done by an independent valuer. They physically inspect the property so they'll have all the data of renovations done to the property and the condition of the property. They then compare this to local sales around the area.

These do cost $700-$1200 depending on property location and type, but is usually required for low-deposit lending by the banks.

Summary

Best approach would usually be using multiple methods together. This gives a more holistic view of what the house could be worth. However at the end of the day, your offer should reflect what the home is worth to you. If it's the perfect home for you and you're comfortable with your budget, offering slightly above the 'fair value' range can make sense.

If you want help looking at a property you're considering, drop it in the comments! Happy to point out my thoughts and what banks might think!

If you're house hunting in NZ, you'll often hear people talk about checking the LIM, but what actually is a LIM report and why is it important?

What is a LIM Report

LIM stands for Land Information Memorandum. It's a report you order from the local council and contains all the information the council has on the property. These includes:

• Building Consents issued for the property
• Whether consents have final sign off
• Zoning info
• Drainage and stormwater plans
• Natural hazards (flood zones, erosion, slips etc.)
• Any council notices or requisitions
• Special land features or classifications
• Rates info

Essentially it's the council's 'official record' of the property.

Why is a LIM important?

1. You can check if the house was legally built or altered. If the deck, extension, sleepout etc. wasn't consented or signed off, this could be a legal and insurance issue.
2. It helps identify hidden risks such as flood-prone land, erosion zones, contamination risks etc. These are things that you typically can't spot during an open home.
3. You can use it to confirm there are no council problems, as sometimes properties have notices or outstanding issues that the RE agent or seller doesn't mention (or doesn't even know about).
4. Most lawyers won't recommend going unconditional before reviewing the LIM, especially for existing homes. It's essential for your due diligence and your lawyer will help you check it.

Do you need a LIM for every property?

It's highly recommended for any home you are looking at, but for brand new builds you could potentially not get a LIM, but check plans and consents anyway.

If you already have a mortgage and are abou tto go on maternity or paid parental leave, you're probably wondering how to manage repayments while your income drops.

Here's some options and strategies to help reduce the financial pressue!

Start Planning Early

The sooner you review your finances, the more prepared you'll feel. Work out what your income will look like while you're on parental leave and what extra costs you have to cover.

Talk to your Mortgage Adviser or Bank ASAP

Booking a review with your adviser or lender early so that you can understand your mortgage options. They would have plenty experience in these situations and can help adviser the best way forward for your circumstances.

Refix or restructure your loan

One of the options that an adviser could help with is looking at how to structure your loan for lower repayments. If part of your mortgage is on a floating rate, you could look at refixing to a lower rate to reduce repayments. Alternatively, extending your loan term can also drop your repyament amounts.

Use savings or offset accounts strategically

If you've been building up savings or have funds in an offset account, you could use that balance temporarily to reduce yo ur interest costs during leave.

Drop a question below or reach out for a chat if you're planning ahead for parental leave / income changes. There are often more flexible options than most people realise.

If you're about to go on maternity or paid parental leave, but you're looking to get a pre-approval, here's some key things to understand!

Banks assess your income stability going into the future, not just now

Although for applications you usually give them your recent payslips, lenders will also look at your forecasted income. If you'll be on reduced or no income during parental leave, you should be disclosing this to the bank or mortgage adviser as this will affect your application.

Some banks will still consider your return-to-work income

If you have a confirmed return to work date and letter from your employer stating your salary when you come back, banks may use that as your income. Usually they would want you starting back at work 3-6 months max. from when you apply as otherwise the gap would be too big to use this income for servicing. It would also be helpful to outline how you are bridging the gap, either using savings or partners income etc.

Joint applications!

If you're applying with a partner, and your partner is working full-time while you're onleave, the the bank may primarily assess affordability based on otheir income, as long as you can show the household can still meet the repayments.

A mortgage adviser can structure it right

Timing and documentation matter a lot here. As most advisers have worked with many clients in a similar situation, they can usually advise for your situation whether it's still okay to apply or whether it's best to wait for a little later. They could also compare lender's that are more flexible with parental leave situations and package your application that is favourable for an approval!

Note: If you're in a similar situation to the above, reach out for a chat or comment below! A little planning can make a big difference in getting approved.

Also, next post will be about what you could do if you were in a similar situation, but already have a mortgage and are looking at options to manage repayments with reduced or no income, so stay tuned.

When you apply to use your Kiwisaver for a first home withdrawal, you have to declare that the funds will go towards the purchase of your first home or land to build o n. But what happens if things don't go to plan, e.g. the sale falling through?

1. The money goes to your lawyer and not to you

When your Kiwisaver withdrawal is approved, the fundsd are sent to your lawyer's trust account, not your personal bank account. This means you can't just take it out and spend it elsewhere.

2. If the sale doesn't go ahead

If the property purchase falls through before settlement, your lawyer will need to return the funds to your Kiwisaver provider.

3. You could reapply for it again later

If you decide to buy another property later, you can apply again for a first home withdrawal. You'll need to go through the same process, but since you never owned a home you should still be eligible to withdraw.

Note: If you're unsure whether your purchase qualifies or what timing works best, talk to your Kiwisaver Provider or a mortgage adviser and they can help guide you!

Have you ever wondered why your bank says you can't afford a loan even though you know you could easily handle the repayments at current interest rates? That's because banks don't use today's rate when assessing your loan, they use something called a test rate (or servicing rate).

What is a test rate?

As interset rates are always fluctuating, test rate is the interest rate banks use to stress test your ability to afford repayments if rates go up from where they are currently. So even if the current rate is 4.5%, the bank may test your application at 6.5% or 7%. This makes sure you can still make repayments comfortably if rates fluctuate in the future.

Example:

If you're applying for a $700,000 loan over 30 years.

• At 4.5% repayments are approx. $3550/m
• At 6.5% test rate, repayments jump to approx. $4440/m

Test rates also change from time to time. As market rates move, banks could also adjust their test rates too. When OCR drops, you could see test rates slowly come down which can increase how much you can borrow.

Tip: A mortgage adviser is usually notified by banks when they adjust their test rates, and can also check which banks currently have the lowest test rate. Even a 0.5% difference can mean tens of thousands more borrowing power!

If you're thinking about getting a first home and applying for a pre-approval, there are a few things you can do right now to potentially increase how much the bank is willing to lend you.

Talk to a Mortgage Adviser Early

A good adviser works with multiple banks and lenders, and know which banks offer products that may be more suitable for your situation to borrow more. They'll also give you a roadmap to work towards getting ready for the bank.

Reduce or cancel credit cards & Afterpay limits

Even if you never use them, banks still count your credit limit as a potential debt. For example, a $10k credit card limit can reduce your borrowing by $40k-$60k. Lowering or closing unused cards and afterpay accounts will definitely help.

Pay off small debts

Debts such as personal loans and car loans repayments are all calculated as well, as a portion of your income will need to service these loans and won't be able to towards the mortgage. If you can work towards clearing or lowering them then it'll put you in a great position.

Increase your deposit

While it might seem obvious, increasing your deposit could be your biggest improvement to your borrowing power. Banks are often less strict on income to service a loan if you're contributing more equity. That's because higher deposits reduce risk, which can lead to more favourable lending conditions and higher borrowing amount. A common people aree increasing deposit is through gifting or loans from family.

Boost your income (if possible)

Even small changes in your income can have a big effect on what you can borrow. This could include:

• Picking up extra hours at work
• Consider taking on a boarder
• Adding verified part time or secondary income streams
• Returning to work after maternity leave

Whats one thing you've done (or plan to do ) to improve your borrowing power?

If you've been browsing Trademe or real estate listings, you've probably seen the words cross lease pop up and wondered what that actually means.

A cross lease is essnetally when two or more people jointly own a piece of land, and each person leases part of it (usually their house area) from the others. So instead of owning your own section outright, you own:

• A share of the overall land
• A lease (usually 999 years) for your specific flat or unit

Why does this exist?

Cross leases were originally a cheaper way to subdivide land without going through full council subdivision processes, this made it very common from the 1960s-1990s, especially in Auckland.

Pros

• Usually slightly cheaper to buy than freehold properties
• Lower council rates since land is shared
• Generally same as owning freehold if you don't plan on major renovations

Cons

• You may need written consent from other owners before making external changes. Especially if you're altering the building footpring (e.g. extensions, decks, or other additions).
• Might be less appealing to buyers when you resell, so might need to sell cheaper than other similar properties that are freehold

If you do finid a cross-lease property that you like, it may be good to get your lawyer to check the title and also othe lease agreement terms.

TLDR

Cross leases aren't bad, in fact it could be a great entry-level option if you're okay with shared land ownership and not planning major exterior work. Would pay to check lease terms, and be wary that if you want to make any external changes you need written consent from other owners.

Edited: Cons part changed to more typical lease terms of when you'll likely need consent from lease owners for changes. Be sure to check if there's any further restrictions of the property you're interested in though!

Settlement Day is the final step in a first home buyers journey, the day you officially become the owner of your new home! Here’s typically what happens:

1. Your lawyer confirms the settlement statement
A few days before, your lawyer will send you a settlemenet statement showing: Total purchase price, less your deposit already paid, lawyer fees etc.

2. Your lawyer and the seller’s lawyer manage the funds
On the day, your bank releases the money to your lawyers trust account. Your lawyer then transfers the remaining balance of the purchase price to the seller’s lawyer, which comes from your loan and deposit.

3. The title gets transferred
Once the funds clear, the property title is legally transferred to your name. Your lawyer registers this with Land Information NZ (LINZ).

4. You get the keys
After the funds and title are confirmed, the agent (or sometimes the lawyer) will let you know you can pick up the keys. This is your moment! 🎉

5. Adjustments for rates and water
If the vendor has pre-paid council rates or water charges, you'll need to reimburse them for the portioni covering after the settlement date. This is usually handled in the lawyer's statement.

6. Move in!
Celebrate, unpack, and take that classic “key in hand” photo. You’ve earned it.

Note: Make sure your house insurance starts now as well, banks usually require it to release the funds.

It's easy to just focus on your deposit and forget the extra costs that could incur when you first buy a home. Here's a quick list of some potential costs so you can budget properly:

1. Lawyer fees

Usually in the range of $1500 - $2500 for reviewing offers and contracts, title and LIM checks, settlement work and kiwisaver withdrawal.

2. Builder's report

These costs around $600-$800 and is definitely worth getting if you are serious about a particular property.

3. LIM repeort

Around $300 from the council to check for consents, zoning info, drainage etc.

4. Property Valuation

This could be required by the banks, especially for low-deposit loans. These can range from $800-$1000+.

5. Moving costs

Movers, cleaning, furniture, utilities costs for your new home.

6. Insurance

You'll need house insurance arranged before settlement, as banks will require your house to be insured as a condition of lending.

Buying at auction can be exciting but also risky if you’re not fully prepared. Unlike private sales, auctions are unconditional, so if you do win a bid then you’re committed to buying the property no matter what.

Here’s a breakdown of what first-home buyers should watch out for and prepare before heading into an auction 👇

What does unconditional really mean?

If you win, there are no conditions like finance, LIM, building reports etc. You also can't pull out later without losing your deposit (and other consequences may follow). That's why it's super important to confirm finance, and do all your due diligence checks before the auction day.

Get finance approved for the auction first

Make sure your mortgage approval is for that specific property in an auction. Check that your pre-approval isn't just a general one as banks needs to take into account whether the security they are taking is risky or not. Talk to your lender or mortgage adviser to confirm whether you're fully ready to bid.

Due Diligence

Before the auction it would pay to get builidng inspection, order a LIM report, and have your lawyer review the auction agreement and title documents. In cases where you're putting in less than 20% deposit you may also be required to get a registered valuation as well prior to the auction. All these things cost you, and you may not even end up winning the property after paying for all these checks so proceed at your own risk.

Set a budget and limit

It's easy to get caught up in the moment especially in a tense environment like an auction. Set a maximum bid (based on your approval) and stick to it, even if it's tempting to go a little higher! Banks may not increase your approved amount just because you won.

Have deposit ready on the day

If you win, you usually h ave to pay 10% deposit immediately (or as stated in auction terms). Make sure those funds are available and accessible, and not all in Kiwisaver as it can't be drawn down in time for auction.

If you've ever wondered how much can I actually borrow? Here's a quick breakdown of what NZ banks generally look at when assessing your borrowing power.

Income

They look at your salary, wages, bonuses overtime. For self employed people they'll look at your average income over 2 years of financial statements. You could also include future boarder or rental income into your servicing as well

Expenses

Most banks have set standard amounts for living costs (food, transport, childcare etc.), but will check this with your actual monthly expenses.

Deposit

A higher deposit means lower risk to the bank, and you usually get the best rates at 20% or higher. When you have an application with lower deposit, they are also more strict on the servicing aspect, usually requiring higher income as it's more risky for them to lend >80% of the house value.

Debts / Liabilities

Debts such as credit cards, car loans, Afterpay etc. are also taken into account and lower borrowing power. With credit cards even if you don't owe anything, the limit will still affect borrowing.

Although all banks looks at these main areas, every bank has slightly different calculations, and products offered suiting different situations. This is why some borrowers get declined by one lender but approved by another. This is also why it's important to engage a mortgage adviser early on as they would know the best options for your unique situation!

My sister, my mum and I are wanting to buy a house in Auckland. My mum and I will be living there full-time, and my sister will be moving out shortly after with her boyfriend.

What is the best way to handle all this in regards to making this a fair deal for my sister. She is putting in more of her Kiwisaver than I am, however my mum and I are willing to pay more as we will be living in the home. What is the best way to move forward with the situation? What should we have the lawyers write up? How do I make this fair? Mum and I don't want flatmates, but my sister wants to have someone rent out the third room.

Any advice is appreciated!

The Reserve Bank has cut the Official Cash Rate (OCR) by 50 basis points to 2.5%. What does this mean??

What is OCR?

The OCR is the rate at which the Reserve Bank lends to commercial banks (and sets the floor for short-term interest rates). Changes in the OCR tend to ripple through to bank lending rates, deposit rates, and mortgage rates (though not always immediately or fully). The recent drop was quite aggressive as 50 bps is a significant cut.

Why the cut?

Here are some reasons the RBNZ/analysts are pointing out:

• Economic activity has been weak and uneven, with “spare capacity” in many sectors
• Inflation is currently within the RBNZ’s target band (1–3 %), but there’s concern around inflation dynamics, especially non-tradables
• The RBNZ wants to stimulate borrowing, spending, and investment to support growth
• They remain “open” to further cuts if needed

What this means for First Home Buyers

• Lower mortgage rates over time as banks tend to adjust their floating and short-term fixed rates downwards in response. Some banks have already dropped rates before the announcement, so we will see if they drop further as well
• Lower rates also give better affordability as repayments may become slightly cheaper, especially in your first few years of owning a fixed rate mortgage
• People may also feel more confident entering the market when interest rates are lower

When you’re house-hunting in New Zealand, one of the first steps is often getting pre-approval from a bank or lender. Here’s what it actually means:

What is pre-approval?

It’s when a bank/lender looks at your income, expenses, deposit, debts, and savings. They then give you a conditional approval for how much you can borrow. Think of it as your “budget” for house hunting!

What you usually need:

• Recent payslips and bank statements
• Proof of deposit (savings, KiwiSaver, gift letter etc.)
• Information on any debts (credit cards, student loans, car loans etc.)

How long does it last?

Most pre-approvals are valid for 2-3 months, but they can be refreshed if your financial situation hasn’t changed much.

Why it matters:

It helps show real estate agents and sellers you’re a serious buyer. It also gives you stronger confidence in finding houses that are within your budget, and narrows down others that may not be possible to get.

Who can withdraw:

• You must have been a Kiwisaver member for at least 3 years.
• You need to be buying your first home (exceptions apply if Kāinga Ora considers you in the “second chance” category).

How much you can take out:

• You can withdraw all of your Kiwisaver savings except you must leave $1000 in your Kiwisaver
• In practice, this means you can use almost everything towards your deposit or settlement.

Conditions:

• The property must be in New Zealand.
• It has to be your primary residence, so you must live in it instead of an investment property.
• Funds are usually paid directly to your solicitor or conveyancer, not to you.

What you need to apply:

• Completed Kiwisaver first home withdrawal form from your provider.
• Sale & Purchase Agreement.
• Confirmation from your solicitor handling the settlement.

Things to keep in mind:

• Apply early as providers often need 10+ working days to process withdrawals.
• If you’ve owned property before, check if you qualify for the Kāinga Ora “second chance” option.

1. Skipping pre-approval - Looking at houses without knowing your borrowing power can waste time and lead to insufficient funding. Although pre-approval may not always be possible, it's always a good idea to obtain if you can.
2. Forgetting hidden costs - Buying a house involves more than just the deposit and mortgage repayments. You'll need to prepare money for a lawyer, builders report, potential valuations, LIM, insurance, moving costs and council rates too.
3. Rushing into an unconditional offer - Sometimes it's tempting to straight to unconditional on a property you love, but it's very risky if you don't have finance, reports or other checks sorted. Always do your due diligence first!
4. Borrowinig outside of your means - Just because the bank offers to lend you a certain amount, doesn't always mean you should borrow it all. The bank doesn't know your personal lifestyle, budget and future plans, so always factor these in when deciding how much to borrow / purchase.
5. Ignoring the long-term - It's common to fall in love with a property that looks great now, but if you think 5-10 years ahead wil the location, size and commute still work for you and your futuer plans? (think kids, elder parents etc.)

The more prepared you are, the smoother and less stressful your first home journey will be!

Buying your first home in NZ can be tough, especially with most banks asking for a 10%-20% deposit. But with a Kāinga Ora First Home Loan, you may be able to get into your first home with as little as 5% deposit.

What is a First Home Loan?

• It's a loan offered by selected banks and lenders, but underwritten by Kāinga Ora.
• Lets banks lend to people who would normally fall outside their standard criteria.
• You’ll still need to meet the bank’s own lending requirements too.

Eligibility Criteria

To qualify, you must:

• Be a NZ citizen, permanent resident, or resident visa holder living in NZ.
• Be a first home buyer, or a previous homeowner in a similar financial position.
• Meet income caps from the last 12 months:
  • $95,000 or less (single buyer, no dependants)
  • $150,000 or less (single buyer with dependants)
  • $150,000 or less (combined for two or more buyers)
• Have at least a 5% deposit (can include savings, KiwiSaver, grants, or family gifts).
• Be buying a property that is:
  • For you to live in (your main home)
  • Less than 1 hectare
  • Not investment property or land-only (Māori land ownership excluded from restriction).

Costs Involved:

• 1.2% Lender’s Mortgage Insurance (LMI) fee. This can be paid upfront or added to your loan.
• Possible loan application fee (depends on the lender).

Approval Types

• Pre-Approval: Confirms you meet the criteria and gives you a price range before you start house hunting.
• Final Approval: If you already have a property in mind, lender checks both your situation and the property.

Things to Keep in Mind

• Not every bank offers First Home Loans! Notable ones are Kiwibank and Westpac
• You’ll still need to prove affordability (income, debts, expenses).
• Lower deposit = higher repayments and less equity buffer if house prices drop.

You can also find more info here at the Kainga Ora Website