Buying your first home is a big deal and it can definitely feel a bit scary. But with the right plan (and some great support), it doesn’t have to be. Here’s what you need to know before you start scrolling property ads and heading along to open homes.
Most first-home buyers in New Zealand need around 20% of the property price as a deposit, with the rest covered by a home loan. For example, if a home costs $600,000, you’ll need $120,000 saved as a deposit and then you’ll borrow the remaining $480,000 as a mortgage. On top of your deposit, it’s a good idea to have some extra funds tucked away for legal fees, property valuations, LIM reports, or a builder’s inspection. I usually suggest setting aside about $5,000 for these sorts of costs. And once you’re in the door, don’t forget to budget for ongoing expenses like rates, insurance, and a little buffer for maintenance.
Saving that kind of money can feel overwhelming, but there is help available. If you’ve been contributing to KiwiSaver for at least three years, you may be able to use some of your savings towards your first home deposit. In some cases, banks also offer loans with less than a 20% deposit, though these are limited and usually given to their existing customers first. For some people, family support can also make a big difference, whether that’s through gifted funds.
Another option some buyers look at is teaming up with friends or whānau to combine resources and share the costs of buying and maintaining a home. If you go down that path, it’s important to get independent legal advice so everyone’s clear on their responsibilities. Of course, if you’re flying solo, the best thing you can do is set clear and achievable savings goals. Having a plan makes it much easier to stay on track and keep the momentum going.
One of my top tips is that once you’ve saved a decent deposit, you should get pre-approved before you start house hunting. Pre-approval gives you a clear picture of how much you can spend and makes the process a whole lot less stressful. It also means that when you do find the right home, you’re in a stronger position to make an offer.
Buying your first home might seem like a huge mountain to climb, but with the right plan, the right support, and a bit of patience, it’s absolutely doable and easy peasy!