Are you thinking of purchasing your first home in 2025?
Well looking at how things are shaping up we believe a lot of things are aligning that could make it a good year for first home buyers.
Firstly, the house prices have remained at a relatively low level for a couple of years now. While they’re anticipated to start increasing, most people believe that won’t happen until mid to late 2025. There could be a real opportunity to get in during the first three or four months of 2025 while house prices are still what is deemed reasonable.
The other positive news for first home buyers is what’s happening with interest rates. Interest rates were pretty high at the start of 2024, but as we go into 2025 they’re down to pretty good levels, and there’s talk that they will drop even further. The expectation was to have a 0.50% drop in February followed by a 0.25% drop in April, but it could even be more than that given the recent news on the economy. The lower interest rates make buying a home just that bit easier.
The other thing that’s happened with interest rates is the banks have now readjusted what they call their test rate. That’s the rate that they test your affordability on to see if you can afford a mortgage. The banks have lowered their test rates, and we’re seeing people now being able to afford mortgages that were told that they couldn’t even three months ago.
What Help Is There?
So, as well as what’s happening with house prices and interest rates, there’s some more good news on the horizon. The banks are chasing business and offering some pretty good deals and some especially targeted for first home buyers.
We have the Kainga Ora first home loan which helps people get into the housing market for their first homes with as little as a five percent deposit, but there is some eligibility criteria. It can work for you if your income is not over the cap that’s set, and assuming you qualify on the other criteria too. The property also needs to not have too much maintenance needed as there is a clause for this.
Then we have new initiatives like ProFundMe that can help buyers get into brand new homes. This is quite an amazing offer where they provide a mortgage for up to 10% of the value at an interest rate of just 1% and that’s for the 30-years too!
We still have the option of doing shared home ownership with a company called YouOwn, and again that helps people who may have lower deposits or struggle with affordability for the larger size mortgages.
We also have some of the non-bank lenders who have more flexible criteria than the banks and are now able to go to 90% so that means with a 10% deposit, even if you don’t fit bank criteria, you may be able to get lending through a non-bank.
That enables you to get into a home with the desired outcome to refinance to a bank over the next couple of years.
Those are just some of the options that we do have available these days.
Make Sure You Have The Best Mortgage Advisers
You want to make sure that you have the right mortgage adviser helping you.
That means having knowable advisers that have access to the huge range of options from both banks and non-banks.
That’s where the team of mortgage advisers here at Mortgage Managers stand out. We do a lot of work with first-time buyers, and therefore we’re always looking at what alternatives are available and upskilling to ensure that we can explain the pro’s and con’s with all of those options too.
So often when your bank might have said NO, we might be able to get somebody to say YES and get your foot onto the ladder, and into your new home.
Our team of advisers are ready to take your call, so feel free to reach out even if you just have a question that you’re unsure of.
We’ve also put together what is probably the best guide for first-time buyers, and you can get your copy online for free.
Why don’t you make the effort to see whether you can buy your first home in 2025?
We can be with you to help you achieve that goal.
