As mortgage advisers we are often asked what deposit is needed for a home loan.
The New Zealand banks are restricted by Reserve Bank rules which means that they will normally ask for a 20% deposit; however they still have the ability to do some lending with as little as 5% deposit. They have always had the ability to do this, but in most cases they won’t unless the applicants are deemed as very attractive to the bank and there is good reason for not having the deposit available.
There are two specific types of loans where you can get a home loan with a 5% deposit;
First Home Loan – from the 1st October 2019 the Government backed Welcome Home Loan has had a name change to First Home Loan. Another change is the deposit that was required for a Welcome Home Loan was 10% and now with the First Home Loan it has been reduced to 5%.
The First Home Loan is managed by Housing New Zealand and we have contacted them to see if there are any other changes but they are not aware of any yet..
