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Home loan sweetener

Most first-home buyers now need a minimum deposit of 20 percent to borrow from a bank. However, if you’re eligible for a KiwiSaver deposit subsidy and Welcome Home Loan you could get into your first home with a 10 percent deposit.

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Housing New Zealand administers the KiwiSaver deposit subsidy and underwrites Welcome Home Loans for participating lenders. It’s been running an online campaign to let first-home buyers know that by combining a KiwiSaver deposit subsidy and KiwiSaver savings with a Welcome Home Loan they may find it easier to buy their first home.

Last month new regional house-price caps, income caps and deposit requirements came into effect for the KiwiSaver deposit subsidy and Welcome Home Loans. These changes allow more people to become eligible and also aligned the criteria for both schemes.

For example, the house-price cap in Auckland increased from $350,000 under the old Welcome Home Loan criteria to $485,000, and the income cap for two borrowers increased from $85,000 to $120,000. (But the income cap for a single borrower has decreased for both schemes and now sits at $80,000 under their new aligned criteria.)

The KiwiSaver deposit subsidy is available to KiwiSaver members who’ve been contributing regularly for at least three years. It’s $1000 for each year you’ve contributed to the scheme, up to a maximum of five years. So an eligible couple could qualify for a $10,000 subsidy.

Welcome Home Loan applicants must have a minimum 10 percent deposit – this could include the money they can withdraw from KiwiSaver, the deposit subsidy they may be eligible for, and any other savings or money from a relative.

You don’t necessarily have to be a first-home buyer to qualify for a Welcome Home Loan.

More information

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