Welcome to the New Year!
Is Your News Years Resolution To Purchase A New Home?
Time to set some goals and make some big plans! Why not start the year making a plan to save for your first home!
We love nothing more than helping our customers achieve their goals of owning a home, below is some helpful information in regards to saving for your first home.
So how much do you need to save for a deposit on a home?
For a purchase price of $450,000
To save a deposit of 10% you would require a minimum of $45,000
To save a deposit of 20% you would require a minimum of $90,000
However note it’s important to leave aside some money for costs including money for fees, lawyers, potentially furniture for the home and an emergency fund for anything that might come up when you move into your first home, for example plumbing repairs.
How long will it take me to save my first deposit?
This all depends on what you are using too purchase your home this could include, personal savings, Kiwisaver, KiwiSaver First Home Start Grant and the possibility of family gifting towards your first home purchase.
We have included four different savings examples are below based on the following;
Say your first home ambition was to save $45,000 over 5 years for a 10% deposit on a house with a purchase price of $450,000
Example 1: CASH SAVINGS
To save $45,000 over 5 years would require you to save $173 per week*
Example 2: CASH SAVINGS AND KIWISAVER
Based on a salary earner of $40,000
Kiwisaver: Would have approximate $10,000**
Savings: To save the remaining $35,000 over 5 years would require you to save $135 per week*
Example 3: CASH SAVINGS, KIWISAVER AND KIWISAVER HOME START GRANT
Based on a salary earner of $40,000
Kiwisaver: Would have approximate $10,000**
Kiwisaver First Home Start Grant: For an existing home based on current policy would be $5,000 however for a new home you could potentially receive up to $10,000***
Savings: To save the remaining $30,000 over 5 years for an existing would require you to save approx. $116 per week, alternatively $25,000 for new would be $97 per week*
EXAMPLE 4: CASH SAVINGS, KIWISAVER, KIWISAVER HOME START GRANT AND FAMILY GIFTING
Based on a salary earner of $40,000
Kiwisaver: Would have approximate $10,000**
Kiwisaver First Home Start Grant: For an existing home based on current policy would be $5,000 however for a new home you could potentially receive up to $10,000***
Family Gifting: Say your family gifted you $10,000 towards your first home purchase this would reduce the amount you needed to save. (NOTE: it is important to seek independent legal advice around gifting, all banks will require a formal gifting certificate that they can provide a template for and that this is a gift that does not require repayment.)
Savings: To save the remaining $15,000 over 5 years for an existing would require you to save approx. $58 per week, alternatively $10,000 for new would be $39 per week*
Points to note:
*Interest: These figures have not included earning any interest on savings, the online savings calculator at sorted.org.nz can be found through the following link this can be useful to work out the accrued interest.
**Kiwisaver: Terms and conditions apply and many factors can change the potential savings balance. Kiwisaver savings calculator
***Kiwisaver First Home Start Grant: Terms and conditions apply in order to receive the grant, and could change at any point.
What would my budget look like when I purchase my first home?
Great question! Use our loan calculator to work our your mortgage repayments and interest.co.nz s a guide for current interest rates, then you will need to take into account new weekly expenses for House and Contents Insurances, The Council Rates and Optional but recommended is Income/Mortgage/Lifestyle Protection Insurances. Check out our resources we have a couple of budget planners that can help you start working out what your new budget would look like.
Summary
An old saying I heard many years ago said if you wrote down your goals you would be 80% more likely to achieve them, why not start planning today and future proof your goal to purchase a first home!
If you have any questions give The Mortgage Girls a call on 0800 864 864 or send a message through the following link and we will be more than happy to chat anytime about saving for your first home!
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