First Home Mortgage

Unlocking the door to your first home, where dreams take root.

When buying your first home, there are many items to check off the list. Here are some of the most essential steps to buying a home and getting your foot on the property ladder.

The first home buyers step-by-step guide to buying a house

Determine your budget

Before you start looking for a house, determine how much money you think you can afford to put towards a mortgage each month. Consider your income, debts, and expenses to determine a realistic budget. A home loan is a long commitment; you don’t want to find yourself in a position 10 years down the track where you’re struggling to keep up with your repayments because you spent more than you could comfortably afford.

When deciding your budget, you’ll need to work out how much money you have to go towards your home deposit. Lenders typically require a deposit of 20% of the home’s purchase price. If you have contributed to your KiwiSaver for more than three years, you may be eligible to access the First Home Grant. This grant can provide you with up to $10,000 to use towards your deposit.

Top tip: Online tools like affordability calculators can help you estimate how much you can afford to spend on a house based on your income, expenses, and down payment.

Get pre-approved for a mortgage

Once you know your budget, it’s time to get pre-approved for a mortgage. Pre-approval will give you an idea of how much money you can borrow from a home loan lender. For example, if a lender pre-approves you for $500,000, you know you can start house hunting, looking at properties up to the value of $500,000.

It’s important to note that pre-approval is an indication of the amount of money you could potentially borrow, and is not a definite amount. There will be conditions attached to the pre-approval such as your chosen property being valued highly enough. For example, if the house you’ve made an offer on is only valued at $400,000, the first home loan lender is not going to provide you with $500,000 just because you’ve been pre-approved for that amount.

Start your search

Once you’ve decided the type of property you’d like to buy — considering things such as location, number of bedrooms, parking spaces, bathrooms, and age — it’s time to begin the search!

A real estate agent can help you find properties that fit your budget and preferences. Look for a licensed agent with a good reputation in your area, to help get the house hunt underway.

Start searching for homes that meet your criteria. Attend open houses, schedule viewings, and take notes on each property you see.

Make an offer

When you find a property you like, make an offer. The real estate agent will prepare a purchase agreement that includes your offer price, contingencies, and any other terms. Making an offer subject to finance is very common. This means the purchase will not go ahead unless your lender approves the mortgage application. This is why a pre-approval is important; it gives you a good idea of how much you can spend on a home, so you can make an offer which then needs to be formally approved by the lender.

Before you finalise the purchase, it’s a good idea to get the property valued by a registered property valuer. This should identify any issues with the property that may affect its value or safety.

Close the deal

If the property inspection and house valuation come back with the right results, it’s time to settle the deal! If you’re happy with the final inspection, and you’re satisfied with the terms of the purchase agreement, it’s time to finalise the paperwork and transfer funds to the seller. This can be facilitated by a conveyancer.

First home buyer NZ FAQs

How do I find the best NZ mortgage rates?

When searching for the best interest rates, it’s important to compare a number of home loan lenders. With many first home loan lenders and home loans to choose from, you should be able to find a product that suits your individual needs. When you’ve found your preferred lender, check if you satisfy their basic lending criteria, then begin the application process on their website.

What fees are involved with an NZ home loan?

The fees will vary depending on the lender, however, common fees include:

  • Loan application fee.
  • Valuation fee.
  • Conveyancing fees.
  • Monthly service fees.
  • Annual fees.
  • Redraw fee.
  • Exit fees. These may apply for breaking a fixed interest rate agreement ahead of the agreed-upon term.

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