Changes to low deposit lending - what options are available for first home buyers?


With all the changes of late to the lending landscape, it has become a little tougher for those seeking finance for their first home. However with the right advice and preparation, first home buyers can find themselves in a great position to buy, with more properties becoming available, flattening house prices, and slightly less competition from other buyers. 

For buyers with a lower deposit (under 20%), it can be slightly harder, however far from impossible to gain finance. Some banks are still working with low deposit lenders, however there are a number of criteria and rules around this. At this stage, the borrower must have a live deal, which means purchase by auction, deadline sale, or a sale and purchase agreement subject to finance before we can apply. 

New build properties are a great option for low deposit lenders, as there is over 80% lending available. This includes turnkey and land and build properties. In the Queenstown and Central Otago market, this type of property is a popular option for first home buyers due to pricing, so this is a great low-deposit option.

If a buyer qualifies for the First Home Loan Scheme, then over 80% lending is available. There are a number of criteria that buyers have to meet, including income caps and house price caps. In the current Central Otago market and the extremely low house price caps, being eligible for this can be difficult, but not impossible. For some, this may mean opting for a smaller or older property than they might have hoped, or living somewhere slightly more remote where the prices are lower. 

If you don’t quite have your 20% deposit yet, then never fear. Come and have a chat with us and we can walk you through accessing your KiwiSaver, your eligibility for the First Home Loan Scheme, or any other options that might be able to get you on the property ladder. 

We work with a wide range of lenders and have options for most. If you aren’t quite in a position to buy, we can also help you get mortgage ready with our free mortgage conditioning service. Give us a call today on 441 1307 to make your appointment.