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Campbell Hastie: First home buyers don't need 20%


By Campbell Hastie

Published: 12:01PM Monday February 25, 2013

As property prices continue to rise, some first home buyers find themselves in a situation where what was once a reasonable deposit on a half decent house has become not much deposit on something they wouldn't put their dog in.

I might be exaggerating (a bit) but I know for a fact some people definitely feel this way in the current market.

They've had their heads down focused on saving and when they come up for air they realise that prices have moved and they're not as close to their desired home loan deposit as they'd hoped.

Not that it's a new phenomenon. If I recall back to the early-2000s the same problem was facing first home buyers then as well. Actually, I was one of those first home buyers so people, I feel your pain.

Back then the answer I found was to see if I could get on the property ladder with what little deposit I did have.

In other words, rather than scrounging around for another 12 months to get to 10% could I actually get going with 5% straight away?

Back then the answer was yes and right now you can do the same so long as you hit some criteria.

As far as I'm concerned ASB and Sovereign are the big hitters in this department with a decent appetite for 95% lending.

Yes, the other majors are doing it too but the ASB/Sovereign policy is on the money, so to speak.

They'll want to see:

· That you've saved all the deposit yourself. Yes, Kiwisaver counts.
· Have low or no other debt.
· A decent amount of income from a long standing reliable source.
· That your credit and account conduct is good.

It sounds simple enough right, but you'd be surprised about the little things that trip people up.

Poor account conduct is one such deal killer which comes in many guises. For example, if you go into unauthorised overdraft regularly don't be surprised if your loan application comes back looking like a weed that's been drinking round up.

First home buyers - what does this mean for you and what would I suggest you do? Two things:

- Firstly, that you get some impartial advice on what you can do as it stands right now. See a mortgage broker and get some advice. You might get an approval which would be great. If not then at least you'll know what you have to work on.

- Secondly, do it sooner rather than later otherwise your current level of savings could end up turning into 2/5 of bugger all as house prices charge off into the sunset.

For more on how to get onto the property ladder faster, go to