There are some major home ownership barriers in New Zealand and “low deposits” tops the list.

There’s been much said recently about the forgotten middle: that is, those Kiwis that can afford a mortgage repayment but appear to be locked out of the housing market, mainly because of the lack of deposit. Research from Westpac and Deloitte suggests around 152,000 New Zealand households earn enough money to afford the mortgage repayments but still remain locked out of home ownership because they can’t find the deposit needed to purchase a home.

Kiwis Want to Buy Homes

Of course these Kiwis want to buy a home.

They’ve done some research and worked out they can afford it, but when they look at how much deposit is needed and the bank criteria, it’s just too hard.

This is especially the case in the larger towns and cities in New Zealand where house prices are higher, and especially so when it’s not just a single person but a family that needs the home.

To buy a home might be costing $700,000 or $800,000, and that means a 20% deposit could end up being $140,000 or more. A lot of Kiwis will have money in their KiwiSaver, but not enough to satisfy the banks. It also becomes harder if there is existing debt, like a car loan or personal loan.

Find The Pathways with SBS Bank

We have been working hard to get first home buyers more choice and better lending options, and can now report that SBS Bank offers first home buyers a range of ways to finance the purchase of your first home.

Kiwi First Home Buyers was developed by Stuart Wills who is one of New Zealand’s top mortgage advisers and the owner of Mortgage Managers.

With the focus on helping first home buyers, the team at Mortgage Managers probably have more exposure to them than any single bank or advisory too with over 200,000 members actively seeking advice. This means that we are often provided with options that are not made available to other mortgage advisers.

We have been working with SBS Bank and now can share some current and some new options.

SBS Bank Offers Kainga Ora First Home Loan

This is the standard low deposit home loan for eligible first home buyers, and the real benefit is you need just 5% deposit.

These home loans have been popular, but there have also been a lot of Kiwis that miss out because they do not meet the criteria. Often this is because they earn too much, have recently changed jobs or sometimes it is because the house needs more than $10,000 spent on maintenance.

To further reduce the home ownership barriers SBS Bank offer a good package called the First Home Combo.

This is a very good option for first home buyers, but it’s important to remember that Kainga Ora do charge a Lenders Mortgage Insurance (LMI) of 1.20% which is added to the loan.

Speak to me and I can explain the pro’s and con’s of this option.

SBS Bank “Limited Release” First Home Loan

As the name applies, this is a limited release given to Mortgage Managers where SBS Bank can offer a home loan to people that might not be eligible for the Kainga Ora First Home Loan.

The good news with this option is the following:

• You need just 10% deposit
• Okay if you earn too much or have recently changed jobs
• No added fees – no Lenders Mortgage Insurance (LMI) or Low Equity Margins (LEM) that would normally be charged
• Plus you get a 1% Cash-Contribution

SBS Bank Funds Shared Home Ownership

Many first home buyers are not aware that SBS Bank support the shared home ownership with YouOwn.

In New Zealand we have had shared home ownership with Kainga Ora in the past. This was known as First Home Partner and due to the model used they ran out of funds; hence this was closed. We have been actively trying to get the Government to review how this operated so they can re-open the scheme, but at this stage it remains closed.

Shared home ownership is a popular option for first home buyers overseas in places like the United Kingdom where they have had a shared home ownership scheme for many years, and closer to home in Australia where they have a Help to Buy scheme too.

We have also had a commercial non-Government option which has been working well, and with the support of YouOwn who help provide the equity required. This has two funding options – a non-bank option with Basecorp Finance and a

This is only available through a select number of mortgage advisers including us.

This is another option that we have, and it has become very popular especially for first home buyers when affordability means you cannot afford the home that would suit you and your family. These types of options mean you can often buy now rather than wait, and you can spend more to get what you really want.

The benefits are:

• From 5% deposit and 80% from SBS Bank 
• No added fees – no Lenders Mortgage Insurance (LMI) or Low Equity Margins (LEM) that would normally be charged
• Easier Assessment (standard assessment criteria)

Banks Will Not Always Approve Your Home Loan

Sometimes a bank is not going to be able to help.

As well as the SBS Bank offers, and other bank options we still have our non-bank options for first home buyers too. This may help if you have credit issue or account conduct that means the bank will not approve the lending, or possibly it’s too hard to prove your income.

I have a lot of experience with non-bank options too, and these types of lenders can be useful when you are going through a stage that means banks are not going to approve you. You are often better off buying with non-bank lending rather than not buying at all.

Let’s Assess the Best Option For You

Let’s find ways around those home ownership barriers!

The key thing is to speak to a mortgage adviser who has the full range of options and experience too.

As a mortgage adviser with Mortgage Managers I have access to many options that banks cannot offer, and other mortgage advisers do not have access to the range of options either – and especially all these options that SBS Bank offer.

I also have experience that enables me address many of the home ownership barriers, find solutions that will work for you, and then assess the options and ultimately provide the best option for you.

This is what I do everyday.

It costs nothing to have a quick chat!