Kiwibank says it will pre-approve mortgages for up to 90% of the price of KiwiBuild homes, and will also contribute $2000 towards buyers' moving or legal expenses.
The announcement comes on the same day the online pre-qualifying page went live on the KiwiBuild website.
KiwiBuild homes will be priced between $500,000 and $650,000 depending on their size and location, so with a 90% mortgage buyers will need to have between $50,000 and $65,000 for a deposit and be able to service a mortgage of between $450,000 and $585,000.
In a statement Kiwibank Group Manager Marketing Mark Wilkshire said Kiwibank was putting itself out there as the first choice for KiwiBuild buyers.
"There is an expectation that as the largest New Zealand-owned bank, we help as many first home buyers as we can," Wilkshire said.
"First home buyers may be aware of Loan to Valuation Ratio (LVR) restrictions and many assume this means they need a 20% deposit.
"Unlike some other banks, the minimum deposit for first home buyers at Kiwibank is only 10%.
"KiwiBuild has the potential to be a game changer for the residential housing sector and we are keen, as always, to make a positive difference for our customers and the New Zealand economy," he said.
To be able to purchase a KiwiBuild home, prospective buyers must first register their interest on the KiwiBuild website, then get pre-approval by entering personal details and supporting documentation.
A pre-approved mortgage will assist that process.
Potential buyers who meet the criteria will then go into a ballot to be able to purchase a home.
The first ballot for new KiwiBuild homes, which will be located at Papakura in south Auckland, will open in September.
14 Comments
Really?
Like 'all things being equal', they will only require a 10% deposit. It's all the other 'qualifiers' that will determine who gets offered the 10% minimum. It's not like Kiwibank are going to take the 10%ers and other banks will get all the 20%ers.
What they are doing is classicl 'bait and switch' in that by getting first out of the blocks with their offer, they will get more applications than they want, which will allow them to cherry pick the best qualified. And the best qualified are the ones that can put down MORE than a 10% deposit and/or have other security/guarantees, even if they only borrow 10% and put the rest into a Kiwibank account.
And the ones that miss out, even though they have only a 10% deposit, well they have got next to no chance going to another bank.
Love it - lets build 100,000 more homes, drop the business confidence till its out the gurgler, predict poor economic conditions for the next couple of years and unemployment to rise
and drop deposits down to 10% to ensure all those lucky buyers hit negative equity quicker -
congruent it is not
why would you use median income?... you'd use the FTB (couples') income to determine DTI ratio surely.
Apparently 7x income is what the ASB online calculator works off.. but need 20% deposit. So more than likely its already happening, 7x combined income, 90% LVR and stick em with a low equity fee/ higher interest rate.
So BAU...
Well... I think I know where Kiwibank's additional capital will be going... down the toilet as it takes losses in high LVR lending into a softening housing market the other banks are gently stepping back from.
'Winning' market share in a market no one wants to lead is not 'winning'.
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