Getting ready for your first home loan
It's important to begin your first home journey with plenty of time to get organised.
Your end goal is of course a house, but first you need to get a pre-approval.
Getting pre-approved is like your financial green light from the bank, giving you a clear idea of how much you can borrow.
1- Reduce your debt
It’s essential to get on top of debt before buying a home.
When you apply for a home loan, lenders run a credit check to assess how you manage your money. Maintaining a good credit score gives lenders confidence in your financial habits.
Common debt:
- Afterpay: Buy now, pay later schemes can quickly add to short-term debt, so it’s important to curb these habits early.
- Credit cards: Useful for emergencies or rewards, but carrying a balance can lead to high interest. If costs are adding up, consider consolidating into a lower-rate personal loan.
- Personal loans: Often used for big purchases, but multiple high-rate loans can be costly. Consolidating them into one lower-rate loan can help reduce interest.
Need a hand with consolidating some of your debt?
Our personal loans can help put all of your debt into one place, having a lower interest rate and just one repayment.
2- Sort your deposit
You can use several different funds for your first home deposit, including:
a) Your KiwiSaver balance
- You can use part or nearly all of your current KiwiSaver balance towards your deposit. You’ll need to apply to withdraw your KiwiSaver funds once you’ve been pre-approved for your home loan through your chosen provider.
b) Gifts from family and friends
You may be able to use gifted money from family or friends as part of your deposit. Your bank will require a gifting certificate to confirm that the money was a genuine gift and not a loan.
c) Personal Savings
This includes money you’ve saved yourself whether that’s through regular savings, investments (like Sharesies), or term deposits.
Need to make some extra interest on your money?
Our term deposits have a $500 minimum deposit amount, meaning you can make more on your funds, faster.
✳️ Hot tip
Lenders like to see consistent savings habits. Showing that your current rent and savings are roughly equal to what your mortgage repayments might be demonstrates that you can comfortably manage payments and are likely to meet them on time.
3- Save for the extra costs
Your deposit isn’t the only cost involved in buying your first home. Additional fees can add up to around $5,000 throughout the process.
Here are some of the main costs you’re likely to come across:
- ⚖️ Legal fees: $1,000–$3,000
- 🏠 Building inspections: $500–$1,000 per property
- 🚚 Moving costs: $500 (DIY van hire) to $2,000+ (full service)
It’s important to have extra savings set aside to cover these expenses. Doing so helps you avoid last-minute stress and ensures you’re financially prepared when it comes time to move.
Need to build up your savings?
We have various savings accounts to fit your needs.