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‘First Home Grant’ Changes
The government have just increased the “First Home Grant” house price caps in many areas of the country after the post Covid-19 property price surge, which will allow more Kiwis to access the grant to increase their house deposit.
What’s Happening to the House Price Caps?
In Auckland, the existing property cap has risen to $700,000 and the new build cap has increased to $875,000. In Wellington, the existing property cap has risen to $750,000 and the new build cap has increased to $925,000. In Christchurch, the existing property cap has risen to $550,000 and the new build cap has increased to $750,000.
Many of the other regions throughout the country have also had adjustments made to their caps. Check out your region’s cap for both existing homes and new build properties here:
Income Caps to Remain
Whilst the old annual income caps remain for two or more buyers to have combined income before tax of no more than $150,000, a new income cap has also been introduced for a single buyer with 1 or more dependents to have an annual income before tax of no more than $150,000 to be eligible to apply for the First Home Grant. Single buyers with no dependents will still have the annual income before tax capped at no more than $95,000.
The KiwiSaver Contribution
The requirement to have contributed at least 3% of your income each year has been adjusted to be either 3% of your income each year or just $1,000 per year, whichever is the lower of the two. This will assist people that have had down time in-between jobs or have taken paternity leave where they were not contributing to KiwiSaver.
The Big ‘First Home Loan’ Change
They have also announced that from 1st June 2022, they are removing the house price caps for the “First Home Loan.”
The “First Home Loan” product has been available to people with less than 20% deposit, giving them the ability to apply for a home loan of up to 95% of the property value.
We thought the low purchase price caps made this unrealistic for many areas throughout New Zealand, so it’s a big win to have these removed.
The change brings great news for first home buyers with less than 20% deposit, as since December last year the banks in New Zealand have had extremely limited offerings of home loans to borrowers with less than 20% deposit.
It is estimated to help thousands more Kiwis into their first home every year throughout the country.
Take the Next Step…
With our many years of experience, we can guide you through your home ownership journey, taking the stress out of buying your first home. So rather than saying one day, make this day one for taking action and complete your details below; then one of our Mortgage Advisers will be in touch soon!
How can I come up with a house deposit?
Lending criteria are always subject to change. The information contained in this blog is not tailored mortgage advice; please contact a Connect Me Mortgages Adviser to get tailored mortgage advice for your own financial position.