home buyers need to know before diving in
First-home buyers in New Zealand are increasingly utilizing low-deposit loans as banks ease lending restrictions. While this helps buyers enter a flat market, experts warn that smaller deposits often come with higher interest rate margins.
Why it matters
Rising low-deposit lending reflects shifting housing market dynamics and increased accessibility for first-time buyers despite potential long-term costs.
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Low deposit home loans are on the rise and the majority are first home buyers. Photo / 123rf
The property market winds are blowing strongly in first-home buyers’ favour – and as they make the most of the conditions, many are buying with less than a 20% deposit.
Reserve Bank of New Zealand (RBNZ) data for June shows $1.27 billion was lent to borrowers with less than a 20% deposit, up almost 33% on June last year. Of that, 69% ($881 million) was loaned to first-home buyers.
Mortgage adviser at The Loan Market Michelle Isemonger told me that about half of their first-home buyers have less than a 20% deposit, helped by RBNZ low-equity rules loosening and bank appetite improving.
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