When applying for your first home loan in New Zealand, some banks accept deposits as low as 5%. Deposits can come from various sources, including:
– Cash savings
– Kiwisaver savings
– First Home Grants (if you qualify)
– Gifts
With access to a wide panel of lenders, we can help you secure the best mortgage rates and loan terms tailored to your needs.
Fixed rate home loans allow you to lock in an interest rate for a set term, giving you certainty with your repayments. However, you won’t benefit from lower rates if they drop during your fixed period.
Pros:
– Predictable repayments
– Protection from rising interest rates
– Potential to increase payments, paying off your loan faster (depending on the lender)
Cons:
– Miss out on potential interest rate drops
– Penalties for early repayment or lump sum payments
– Break fees if you sell your home or pay off your loan early
Floating or variable rate home loans fluctuate with the market, meaning your repayments can go up or down.
– Benefit from falling interest rates
– Flexibility to make additional payments
– Potential to draw down on unused loan limits
– Repayments increase if interest rates rise
– Generally higher interest rates compared to fixed rates
Combination loans offer the stability of fixed rates and the flexibility of floating rates, letting you balance security with the ability to make extra payments.
– Mix of predictability and flexibility
– Protection from rising rates on the fixed portion
– Opportunity to pay off the loan faster
– Potential penalties for early repayment on the fixed portion
– Interest rates on the fixed portion might be higher than market rates
Revolving credit home loans work like an overdraft on your everyday account. Your income is deposited into the loan account, and you can withdraw up to your credit limit, with interest calculated daily.
– Flexibility to make lump sum payments
– Potential to become mortgage-free faster
– Savings on interest with surplus funds deposited into the loan account
– Requires disciplined financial management
– Temptation to use it like a credit card, delaying mortgage repayment
Interest-only loans are typically used by property investors or those who want to start with lower repayments. You only pay the interest for an agreed period before switching to a standard loan to start repaying the principal.
– More available funds for other expenses, like renovations
– Can be strategic for property investments
– Option to remortgage to a standard loan later
– Higher long-term costs since the principal isn’t reduced during the interest-only period
– Risk of owing more than the property value if market rates drop
– Pre-approval: Obtain a pre-approval to know exactly how much you can spend on your new property, giving you confidence and certainty.
– First Home Buyer Tips: Consider the type of property that suits your needs, whether it’s buying an apartment as a first home, building your own home, or buying a home for rental income.
– Financial Advisors and Mortgage Brokers: Consulting a mortgage broker or financial advisor can provide you with expert advice tailored to your situation. Look for registered mortgage brokers or local advisors in Christchurch, Canterbury, or other areas.
By understanding the different mortgage options and leveraging resources like Kiwisaver, you can make informed decisions and find the best mortgage that fits your needs. If you need further assistance, don’t hesitate to reach out to a mortgage broker near you for personalized guidance and support.
If you’ve been a Kiwisaver member for at least three years, you might be eligible to use your Kiwisaver savings for your deposit. Additionally, you could qualify for the First Home Grant, which can provide up to $10,000 per person towards your first home deposit.
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