Some great news today for people looking to buy their first home. In the 2022 budget, the government announced some large changes to their First Home Loan and First Home Grant programme.
The main aspect is the removal of the property price caps for the First Home Loan and a large increase in price caps for the First Home Grant. See the First Home Grant price caps on the Kāinga Ora website here.
There are still a few things to consider when you are looking to see if the First Home Loan and First Home Grant are right for you.
First Home Loan Criteria
- Have an annual income of no more than $95,000 (before tax) for a single buyer; or
- Have an income of no more than $150,000 (before tax) for a single buyer who one or more dependents; or
- Have a combined income of no more than $150,000 (before tax) for two or more buyers, regardless of the number of dependents
- Minimum deposit - You will need a minimum 5% of the purchase price of the house you are wishing to buy.
- First home buyer - Or a previous home owner, in a similar financial position to a typical first home buyer.
- You must live in the home you are buying. A First Home Loan cannot be used to buy an investment or rental property.
- You cannot own any other property, this does not include ownership of Māori land.
- You will need to pay a Lender’s Mortgage Insurance (LMI) premium of 1% of the loan account.
- You are a New Zealand citizen or permanent New Zealand resident or a resident visa holder who is ordinarily resident in New Zealand.
- While an age restricition is not part of the standard eligibility criteria for a First Home Loan, in general participating lenders will require applicants to be a minimum of 18 years of age.
First Home Grant
- be over 18
- have earned less than the income caps in the last 12 months
- not currently own any property, this does not include ownership of Māori land
- have been contributing at least the minimum amount to KiwiSaver (or complying fund or exempt employer scheme) for 3 years or more
- purchase a property that is within the regional house price caps
- agree to live in your new house for at least 6 months.