First Home Loans

All-in-one home loans use your savings to reduce the interest charged on your home loan balance, which in turn reduces the overall cost of your home loan.

Also known as a home equity loan, all-in-one loans are a combination home loan and daily transaction account in one. They work by depositing your salary and other income directly into your home loan account, and then as you need money, you withdraw it via ATM, EFTPOS or credit card. You can also set up direct debits from your all-in-one account just like a regular transaction account.

Any leftover funds surplus to your repayment requirements at the end of the month are credited against your home loan balance, reducing the interest charged.

An all-in-one home loan suits only disciplined borrowers able to stick to a budget or seasoned investors. The interest rate on all-in-one loans may be slightly higher than the standard variable rate and you may also be charged a monthly access or account fee.

All-in-one loans are similar to line of credit loans and offset accounts. To assess your requirements and to negotiate a competitive deal, give me a call.

A redraw facility allows you to access additional funds paid into your home loan if you need extra money, up to the amount of the additional repayments. This feature is generally not available with fixed-rate home loans.

This facility allows you to make extra repayments on your home loan, effectively reducing the interest charged and the length of the loan term. Some lenders may limit the total additional amount you can repay within a given period, and additional repayments may not be available or may be capped with fixed-rate home loans.

Many lenders offer either full or partial repayment holidays for specified periods of time, and this is assessed at the time as to why you need it, for example financial hardship. 

During this time, you don’t have to make home loan repayments, however you will generally still accrue interest on your home loan balance. You may need to make additional payments in advance, a lump sum on return, or increase your home loan repayments to access this feature.

The parental leave feature allows you to reduce or defer repayments for an agreed period of time after the birth or adoption of your child. Interest is generally still charged on your home loan during this period, and there may be a fee charged to use this facility.

An offset account is a savings account which is attached to your home loan account.

It works by either:

Subtracting your account balance from your outstanding home loan principal when calculating the daily interest charges. For example, if you have a $300,000 mortgage and $20,000 in your offset savings account, you will only be charged interest on $280,000 even though your “loan balance” is $300,000; OR

Applying the interest earned on your account to your home loan balance. From a taxation perspective, interest paid to your savings account is taxable, but the same interest used to offset home loan interest is not, so you effectively save tax and reduce your home loan at the same time.

Salary credit works in a similar way to offset, by allowing you to pay your salary directly into your home loan account. You then redraw funds as you need them to pay day-to-day expenses. With interest calculated daily, this effectively reduces the principal amount owing for the time your salary is in the account, thereby reducing the amount of interest paid.

Loan portability allows you to transfer your existing home loan from your current property to a new property, without the need to refinance. This can save you money on application and legal fees.

Limited guarantor loans, or equity guarantee loans, allow an immediate family member to assist a borrower with the purchase of their home by acting as guarantor providing additional security. Most banks allow for this in one variation or another. If your family owns a home (with or without a mortgage owing) and would like to help you then consult your Mortgage Adviser, and get legal advice, on the solution that will work best for your circumstances.

If your family is prepared to help but are either unwilling or unable to act as guarantor, then a gift from family is often accepted as the deposit on your first home. This has the benefit to your family of limiting the amount of their exposure and can still be a great start to getting you into your first home.

As of 22 May 2024, significant changes were implemented regarding first-home buying support in New Zealand. The government discontinued the First Home Grant scheme, previously known as the KiwiSaver HomeStart Grant. This decision comes as part of broader efforts to streamline support for first-home buyers. Despite the cessation of the grant, the First Home Loan program remains available, enabling eligible buyers to purchase a home.

Minimum deposits vary between lenders and depend on the loan product you choose. A deposit of 20% or more will help you avoid paying Lender’s Mortgage Insurance (LMI), however you can still get a home loan with a smaller deposit. The total amount of your deposit will affect the types of loans and lenders that are available to you, but there are options to cover every situation.

How much you can borrow (your borrowing capacity) will depend on many different factors, including but not limited to: income, credit history, income history and employment history. For a guide to how much you can borrow, check out our calculator. Before hitting the open home circuit, it’s worth obtaining a home loan pre-approval so you know exactly how much you can borrow.

As the licensee we do not charge for our services – we are paid a commission by the financier. Our advisers can find the best home loan for your finance needs, saving you time and money.

Finding the right property is essential to securing the right home loan. There are many details you need to consider when selecting your home including: location, property type (unit, townhouse, freestanding house), services (roads, public transport, schools, shops, etc.) and how much you can borrow.

Organise a home loan pre-approval
Before beginning the search for your first home, it’s worth securing a home loan pre-approval regardless of how much you’re intending to borrow. An official, written home loan pre-approval will give you clear guidelines on your borrowing capacity, allowing you to negotiate or bid at auction with confidence.

Financial considerations
Many of the decisions you make concerning which property to purchase will be personal, but there are some serious financial considerations you will need to take into account prior to committing to the purchase of your first home. As your mortgage adviser I can help you understand how each one relates to your situation.
> Sourcing your deposit
> Buying within your limits
> Understanding interest rates
> Fees, charges and associated costs

Buy within your limits
Being conservative with your property purchase can pay big dividends down the track. Not only are your repayments easily manageable, but you will accrue equity much quicker. This will allow you to upgrade or move into property investment much earlier and more easily than if you had purchased at the edge of your limits to start with.

Budget in an interest rate rise
When determining how much you should borrow, you need to take into account the possibility of interest rate changes to ensure you can continue to service your loan should rates rise. The general rule is to allow for an increase of around two to three per cent. The past few years have shown that a larger margin, as much as five per cent, may be the safest option, however most lenders work on around three per cent.

Buying property with family or friends is becoming increasingly common. This type of property purchase is usually completed as a tenants-in-common purchase, which allows two or more people to own interest in a property, either in equal or unequal shares.

Secure finance for joint purchases
Loan Market mortgage advisers know where to place your application to achieve the right finance for your tenants-in-common purchase. 

Talk to me to discuss your home loan options.
Tenants-in-common is a popular method for investors, those looking to break into the property market who are not in a stable relationship, and people entering into second marriages or relationships with children from a previous relationship who wish to protect their right to pass the property on to the person/s of their choice.

What are the advantages of purchasing with family or friends?
Advantages of purchasing as tenants-in-common include:
> Shared costs including the property price and all purchasing costs
> Shared ongoing costs including loan repayments, maintenance and upkeep costs, property management fees etc.
> Ability to sell your share or leave your share to whomever you choose, eg. children from a previous marriage

How does home finance work in a shared purchase?
Lenders may allow you to mortgage each share of the property independently, and other co-owners have no obligation to pay a mortgage that is only over another owner’s share of the property. The types of home loans available to secure the purchase include most used for a more traditional joint tenants purchase.
However, some lenders may not permit these types of mortgages, so be sure to check your finance options with your mortgage adviser before agreeing to any purchase.

Should I sign a co-ownership agreement?
In order to avoid any problems in the future, it’s wise to enter into a co-ownership agreement. Among other things, a co-ownership agreement may set out the terms of on-selling shares in the property, proportion of ownership and liability for costs such as the mortgage, maintenance and upkeep. You should also consult a solicitor to ensure your legal rights are protected.