Home ownership case studies
Case studies on how people used our financial products to buy a home.
Craig and Tracey have bought a new home off the plan in the Wellington suburb of Timberlea.
The house will be built in the next 6 months and will cost them $510,000. In the last year Craig earned $85,000 and Tracey, who works part-time, earned $35,000.
They have a $50,000 deposit saved, but this alone is insufficient to secure a loan to buy their home.
Craig joined KiwiSaver in March 2008 and has regularly contributed the minimum percentage of his income to his KiwiSaver account. Tracey has been contributing to KiwiSaver for 3 years.
Generally a mortgage lender would need clients to provide a deposit that totalled 20% of the purchase price. In this case, this would be $102,000.
Craig and Tracey have a First Home Grant pre-approval for $16,000 and have $36,000 KiwiSaver contributions they can withdraw to help with the purchase of a first home.
| House purchase price | $510,000 |
| Minimum deposit required by lender | $102,000 (20%) |
| Deposit components | Saved deposit $50,000 |
| First Home Grants $16,000 | |
| KiwiSaver first-home withdrawal $36,000 | |
| Deposit provided by client | $102,000 (20%) |
| Bank Loan | $408,000 (80% LVR) |
John and Sarah earned a combined income of $125,000 in the last year and have put in an offer on an existing home in Auckland for $600,000. As they have been paying rent in Auckland, they have only managed to save a $50,000 deposit.
Their bank has advised it will lend them $480,000.
John has been a member of KiwiSaver since July 2007, when it was first launched, and has contributed the minimum percentage of his salary/wages each year. Sarah, has been a KiwiSaver member since August 2009.
Both John and Sarah submitted applications to Kāinga Ora for the First Home Grant and have both been approved for $5,000. They have also made applications to their KiwiSaver scheme providers to withdraw their contributions to help with their first home. They are able to withdraw a combined total of $60,000 from their KiwiSaver accounts.
| House purchase price | $600,000 |
| Minimum deposit required by lender | $120,000 (20%) |
| Deposit components | Saved deposit $50,000 |
| First Home Grants $10,000 | |
| KiwiSaver first-home withdrawal $60,000 | |
| Deposit provided by client | $120,000 (20%) |
| Bank Loan | $480,000 (80% of LVR) |
Ben and Toni have an offer to buy their first home accepted as long as they meet the conditions set out in the sale and purchase agreement. The property they’re interested in is a $400,000 existing home in Hoon Hay, Christchurch. They have not been able to save a deposit, but have been KiwiSaver members since it started in July 2007. In the last 12 months, they have earned a combined income of $100,000.
Both Ben and Toni have applications for the First Home Grant pre-approved and are eligible for $3,000 each to help with the purchase of their first home. They are also both eligible to withdraw all contributions including member’s Government contributions (with the exception of the Government’s $1,000 kick-start). Together they can withdraw $14,000.
Banks have advised they will need a deposit of between 15% and 20% of the purchase price ($60,000 – $80,000), which they don’t currently have. After looking through the First Home Loan content, they saw it may be possible to get a loan with only a 5% deposit so applied to a First Home Loan lender and showed that with all of the First Home Grant and first-home withdrawal, they had $20,000 to put towards the purchase. As this totalled nearly 11.25% and because they met the other lending criteria, they were awarded a First Home Loan of $380,000.
| House purchase price | $400,000 |
| Deposit amount | $20,000 ($14,000 + $3,000 + $3,000) |
| Deposit available | 11.25% |
| First Home Loan | $380,000 (95% of LVR) |
Rawiri is looking at buying his first home. Since graduating from university just over a year ago, he has been employed in a local office in Hastings and has earned $60,000 in the last 12 months.
On the advice from his parents, he joined KiwiSaver in 2013 and has contributed the minimum percentage of his earnings towards KiwiSaver from his part-time jobs. He also contributed towards KiwiSaver from the Study Link finance he received while at university.
Rawiri is looking at buying a home for around $300,000. His parents are gifting him a sum of $10,000 and they have this confirmed by a gifting certificate. He has applied for a First Home Grant pre-approval and has been confirmed that he is eligible, providing he buys a home for $400,000 or less.
As most of his contributions have been from part-time work or Study Link, only around $7,000 can be withdrawn from his KiwiSaver account. He has spoken to a First Home Loan lender about a First Home Loan and has been advised he meets the criteria providing he has a deposit of at least 5% of the house purchase price, and that it is within the house price cap for the region.
He asked the First Home Loan mortgage manager if the gift from his parents of $10,000, a First Home Grant pre-approval of $5,000 and his KiwiSaver first-home withdrawal of $7,000 would be acceptable as at least a 5% deposit on a house of no more than $300,000. It was and he was advised he could receive a First Home Loan of $278,000.
| House purchase price | $300,000 |
| Deposit amount | $22,000 ($10,000 + $5,000 + $7,000) |
| Deposit available | 7.3% |
| First Home Loan | $278,000 (92.7% LVR) |
Sione and Louise rent a Kāinga Ora house in Timaru with their son Sam. Louise works full-time and Sione works part-time. They’ve both been KiwiSaver members for three years.
They have contacted Kāinga Ora to enquire about purchasing the house they rent and the good news is that the house is available for sale for $216,000.
With a combined income of $53,000 they are eligible for Tenant Home Ownership grant.
To have the 20% deposit required by the bank they will need $43,200.
The Tenant Home Ownership grant gives them $20,000, which is the maximum amount available. By adding their First Home Grants ($6,000) and KiwiSaver first-home withdrawals ($12,600), plus some of their personal savings ($4,600), they are able to raise the remaining $23,200 required to reach the deposit to buy the house from Kāinga Ora.
| Purchase Price | $216,000 |
| Bank loan | $172,800 |
| Personal Savings | $4,600 |
| KiwiSaver first-home withdrawal | $12,600 |
| First Home Grant | $6,000 |
| Tenant Home Ownership Grant | $20,000 |
Bridget and Peter are Kāinga Ora tenants in Whanganui. They have been tenants in the same property for coming up 20 years and have always wanted to buy their rental property, but have never had the deposit to help with the purchase.
They have a combined income of $62,000 and the house which has been confirmed as being available for sale has a purchase price of $70,000. A 20% deposit, as normally required by banks would total $14,000.
Bridget and Peter have applied for a First Home Loan pre-approval and they have been confirmed as being eligible. This will mean that they only require a deposit of at least 5%.
Being eligible for the Tenant Home Ownership Grant, means that Kāinga Ora would provide them with a $7,000 grant. This would be the 5% deposit that their First Home Loan lender requires to approve their loan application and allowing them the chance to buy their home they have lived in for a number of years with no other savings behind them.
| Purchase Price | $70,000 |
| First Home Loan | $63,000 |
| Tenant Home Ownership Grant | $7,000 |
Page updated: 17 October 2019