When you’re a first-time home buyer in particular, navigating the home loan process can be extremely confusing. So any help that financial institutions can offer in terms of information, education or just good old discounts is terrific. Here’s a roundup of what Canstar has found around the country.
Special discounts for First Home Buyers
TSB Bank offers a discount on the loan application fee for First Home Buyers. They are the only one out of the 9 institutions we rated this year to offer this.
SBS Bank offers a discount on the loan interest rate for First Home Buyers, and they are the only institution out of the 9 we rated this year to offer this.
As for discounts on other products, 3 out of 9 institutions offer special deals on savings accounts for First Home Buyers – SBS Bank, TSB Bank, and Westpac.
Personalised First Home Buyer Pack
A FHB Pack is a pack of useful information provided to you by the lender when you buy or are planning on buying a house. It may include things like things to look out for when choosing a house, or details on the process of conveyancing (processing the sale of the house).
4 out of 9 institutions rated this year offer a personalised FHB pack – ANZ, Kiwibank, SBS Bank, and TSB Bank.
Priority given to First Home Buyers
As you may know, banks are only allowed to make 10% of their lending to “high LVR” loans, where the borrower is taking out a loan for more than 80% of the purchase price of the property. Many banks will give priority to First Home Buyers when they are allocating that 10% of high LVR lending.
7 out of 9 institutions prioritise First Home Buyers for high LVR lending – ANZ, ASB Bank, Kiwibank, New Zealand Home Loans, SBS Bank, TSB Bank, and Westpac.
Of those 7 institutions, 5 allocate the full 10% of their high LVR lending to First Home Buyers – ANZ, ASB Bank, Kiwibank, New Zealand Home Loans, and Westpac.
Free financial planning
Some institutions offer personalised financial planning free for the first 12 months for First Home Buyers, to help them find their feet during that first year of adjusting to a new budget. Of the 9 institutions we rated this year, 4 offer this – ANZ, New Zealand Home Loans, SBS Bank, and Westpac.
Other specialised services
2 out of 9 institutions rated this year offer a specialist lender for First Home Buyers – ANZ, and TSB Bank. Specialist lenders are mortgage lenders who specialise in helping first home buyers find the best loan for them. This can be helpful because the range of home loans on offer can be confusing for those who are new to the market.
When it comes to helping you understand what you’re signing up for, 4 out of 9 institutions offer a specific website designed for First Home Buyers and packed full of information. ANZ, ASB Bank, TSB Bank, and Westpac offer such a website.
There are a lot of options when it comes to finding a home loan, but don’t forget that it’s not the discount alone that matters. The features and fees also need to suit the needs of your household and your budget. You can compare home loans by reading our star ratings report for First Home Buyers or by comparing First Home Buyer home loans on our website.
First Home Buyer grants in New Zealand
We’re quite lucky in New Zealand that we have several helping hands when it comes to saving up for a deposit on our first home. If you are eligible, you are able to apply for both a KiwiSaver HomeStart Grant and the FirstHome Grant (more detail on these below). You can then – again, if you are eligible – combine these grants to apply for the Welcome Home Loan, which only requires a 10% deposit.
KiwiSaver HomeStart Grant
After 3 years of making contributions to KiwiSaver, you may be eligible to apply for a KiwiSaver HomeStart Grant of $3,000 to $5,000 for individuals and up to $10,000 for couples. The grant can effectively be doubled if you are building or purchasing a new home, or purchasing land on which to build a new home, so that the grant may be up to $10,000 for individuals and up to $20,000 for couples.
To be eligible to apply for this grant, you need to make sure that you’ll still have at least $1,000 in your KiwiSaver account after the grant, and you need to plan to live in the house for at least 6 months. People with an annual income of more than $80,000 for individuals or $120,000 for couples are not eligible for the grant. The grant is administered by Housing New Zealand.
Eligible First Home Buyers can apply for the FirstHome Grant of 10% of the purchase price, up to $20,000, from Housing New Zealand. This grant was designed for people who have a modest income and can afford mortgage repayments, but have trouble saving for a deposit. The FirstHome Grant only applies to specific Housing New Zealand properties, and these are usually located in country or regional areas.
The great part is that as of 1 December 2015, Housing New Zealand tenants are now eligible to use this grant to buy the house they are currently renting. (This is unfortunately not available in high demand renting areas: Auckland, Wellington City, Christchurch, Hamilton, and Tauranga.) Tenants who live in a not-for-sale house can apply to buy other Housing New Zealand properties that are for sale.
To be eligible for the FirstHome Grant, you must be planning to live in the house for at least 3 years. People with an annual income of more than $80,000 for individuals or $120,000 for couples are not eligible for the grant.
Welcome Home Loan
If you only have a 10% deposit, you can apply for a Welcome Home Loan. The loan is underwritten by Housing New Zealand and only offered by selected banks and lenders – The Co-operative Bank, Heartland Bank NZ, Kiwibank, NZCU Baywide, NZCU Employees, Nelson Building Society, SBS Bank, TSB Bank, and Westpac.
To be eligible to apply for this loan, you will need a minimum 10% deposit, and the price of the house you are buying must be less than the regional house price cap. People with an annual income of more than $80,000 for individuals or $120,000 for couples are not eligible for the loan.
Because a 10% deposit means your loan is counted as high LVR lending, you will need to pay a Lender’s Mortgage Insurance (LMI) premium of 1% of the loan value. The lender may also apply a loan application fee.
Kainga Whenua Loan Scheme
Housing New Zealand and Kiwibank have teamed up to provide the Kainga Whenua Loan for Maori individuals and Maori land trusts, to buy a one-storey house on piles (but not the land) located on multiple-owned Maori land.
Applicants need to meet Kiwibank’s normal lending criteria. Lenders’ Mortgage Insurance is provided by Housing New Zealand for the loan.