Why have Mortgage Managers created an Accelerated Equity Calculator?
Almost every first home buyer in larger towns or New Zealand cities will start with less than a 20% deposit and of course that generally means that you (as the first home buyer) will not be getting the best deal from the bank.
If you have not been able to save 20% deposit then the next best is to try and get to 20% equity as fast as you can.
Why? We want to help encourage people to get to 20% equity and therefore be able to get the best home loans, the best features and of course the best interest rates without any low equity margins added. You want to have the savings from the lower interest rates, and the flexibility from having the best home loans.
Your aim therefore should be to get to 20% equity as quickly as possible.
If you started with a 5% deposit then it might take a bit longer than if you had a 10% or 15% deposit. The problem with the banks is they penalise you even if you had a 19% deposit!
So how do you get to 20% equity?
There are two ways to build your equity and in most cases they work together:
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- You will be reducing your mortgage owed with each repayment that you make, and if you can increase your repayments then that accelerates how quickly you build your equity.
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- Your home will most likely increase in value over time.
For the purposes of this calculation we have used a default growth rate of 3.60% which is based on the Government stats websites.
We hope that you found our Accelerated Equity Calculator helpful.
This is something that we have created to help Kiwis establish how long it might take to get to 20% equity, and therefore have better choices of home loans, the best features and lowest home loan interest rates too.
Please feel free to share this equity calculator with anyone you know, or on social media. We created the largest Facebook group for first home buyers too: Kiwi First Home Buyers Group and you can share on this group.
You can find our other mortgage calculators under the tools menu, and use them to see visual displays of how accelerated equity can continue to help over the term of your mortgage.
Speak To A Mortgage Adviser
Our team of mortgage advisers know how to structure your home loans, and they are willing to help even if you have previously dealt directly with the bank or with another mortgage broker.
This is a service that we offer at no charge to you as most of the banks understand that you need good mortgage advice and will therefore pay us to help you. It’s not often that you get such valuable advice for free and with no commitment either. This is something that we offer to ensure that you get the best deal from the banks – to keep the banks honest.
We also have arrangements with most banks in New Zealand and know the products to ensure that you are getting the best mortgage that is available for you.
More Information on Accelerated Equity
If you want to know the benefits that having greater than 20% equity means then you should read this additional information too.
There really are no negatives to gaining more equity in your home, but you will see from the accelerated equity calculator that you will need to pay a bit more in the short-term to help you reap the benefits in the longer term.
Reaching 20% Equity – reaching that golden milestone of 20% equity could be your ticket to saving thousands.
How to Choose a Mortgage Broker – you deserve the best mortgage broker who is focused on getting you the best home loan.
Understand the LVR Restrictions – the Reserve Bank explains more about loan to value ratios and why low deposit mortgages cost more.
When you research the way banks are restricted and understand why they charge more when you have less than 20% deposit (equity) then you will also see why our mortgage advisers are so keen to help you strive for accelerated equity as soon as you can.
You also want to know how the value of your home is increasing (or decreasing) and this is where you can sign up for My Homes and get your updated value emailed to you every month.
It’s a great way to keep track without having to think too much about it.