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Welcome Home Loan & Homestart grant changes

Earlier this week the Government announced that they had been "overly ambitious" with their goal to build 100 000 homes in the next 10 years so have reset KiwiBuild. As a part of the reset, it has launched a new "progressive ownership" initiative freeing up $400 million from the KiwiBuild projects.

However, the main benefit for first home buyers is the change to the First Home Loan (previously Welcome Home Loan) and First Home Grant (previously Homestart grant). The main change is the halving of the required deposit to 5%. This sounds like great news for those who have been saving hard for their deposit for their first home and already have 5% deposit in their region however, there are criteria to meet to get access to these two programmes.

What are the specific details?

Great question and the short answer is we don't know yet! With policy that has just been launched, everyone is a bit low on the details. We are eagerly awaiting to see what the lenders policies are and as soon as we know, we can let you know. If you'd like to know as soon as we do, you can register your interest for that here.

As of Oct 1, 2019, there seems to be no change in how things are assessed or looked at by the lenders, apart from the deposit percentage changing. Good news!

First Home Loan Criteria

The First Home Loans have the following criteria:

  1. Income cap - You can have a maximum yearly income of up to $85,000 (before tax) for 1 person. Or a combined maximum yearly income of $130,000 (before tax) for 2 or more people.
  2. House price cap - The price of the house you are buying with a First Home Loan must be less than the regional house price cap which can be seen below. 
  3. First Home Buyer - Must be your first home or in a financial position of a typical first home buyer
  4. You must live in the home you are buying. A Welcome Home Loan cannot be used to buy an investment or rental property.
  5. You cannot own any other property. 
  6. You will need to pay a Lender’s Mortgage Insurance (LMI) premium of 1% of the loan account.
  7. You are a New Zealand citizen or permanent New Zealand resident (holding a ‘Permanent Resident Visa’).
Although this is a great initiative by the government, it is still quite limiting and the number of people we see who fit all of these criteria are quite few. 

The house price caps

Can My Mortgage help if I think I do qualify?

Absolutely! Even if you're unsure, we'd love to chat through what you are doing, your current position and where you may or may not fit. Even if you don't quite fit, there may be another way to go about getting you into a home or we can give you a advice on the key actions to take so that in a short space of time, you may in fact be able to get into your first home through one of these loans.

Update as of October 15 2019

We've now heard from two of the main providers of the First Home Loan, Westpac and SBS Bank that they are accepting applications at 5% deposit with no other major changes to their policies or how they check applicants are able to afford their repayments. This is great news.

Register your interest about the First Home Loan or First Home grant

The My Mortgage team are happy to discuss what this means for you so feel free to register your interest and we'll let you know as soon as we have any more details.

If you do want to chat now and see where you are at, reach out and we'd love to have that conversation and build a plan for you.