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By Suzanna, Client Support Manager and First & Second Home Buyer
Buying your first home right now is pretty hot — and from experience, it can be overwhelming. At work, we’re fielding a lot of questions from first-home buyers like you who are trying to figure out how to get on the property ladder while house prices and interest rates are low.
Here’s a list of our most frequently asked questions to help clarify things. Once you feel ready, get in touch and we can talk you through some next steps — like finding out how much you can borrow, getting pre-approved with the bank, and making sure your KiwiSaver is on track!
Do I need pre-approval before I start house hunting?
Highly recommended! It gives you a solid idea of what you can borrow and puts you in a stronger position when you find a place you love. Just keep in mind it’s not a guarantee — if your financial situation changes, the bank can still say no.
What does it mean to be “bank fit”?
(Otherwise known as 'account conduct'.) Banks will comb through your last three months of statements. Steer clear of buy-now-pay-later, gambling, and overdrafts. What they want to see: steady income, regular savings, and a tidy credit history.
Can I borrow 100% of the property’s value?
For first home buyers, highly unlikely. This is more for investors who have other assets to leverage. Most banks will lend up to 80%, though some stretch to 90–95% with conditions like higher interest or a guarantor.
What upfront costs should I plan for?
Budget around $5,000 for:
Some banks offer a cash contribution that can help cover these.
As a property buyer, once you’ve been around the block a few times (pardon the pun), you know what potholes to avoid. In the meantime, it’s good to be aware and get as much info as you can.
What types of property ownership should I know about?
What’s a LIM report and why does it matter?
A LIM (Land Information Memorandum) from the council flags any issues like flood risk, unconsented work, or contamination. It’s a must-read.
What should I expect from a building inspection?
A qualified inspector will check for structural issues, moisture, pests, and general maintenance. We generally recommend you get your own independent report and list it as a condition on your offer.
Are older homes riskier?
They can be. Pre-1979 homes may lack insulation. Homes built between 1985–2003 could have leaky building or plumbing issues. Always check the era and materials. Our general insurance team at Caveo can talk you through whether your house can be insured and what risks you might be looking at.
How do I pay my deposit if it’s in savings?
Your lawyer will ask you to transfer it to their trust account, usually the day before settlement.
What if my deposit’s coming from KiwiSaver?
Your lawyer will handle the KiwiSaver withdrawal and make sure it lands in their trust account on time.
Why does the Sale and Purchase Agreement say 10% deposit, but the bank wants 20%?
The 10% is part of the purchase agreement. The 20% is what the bank needs for your loan. Two different things.
What’s a cash contribution and how does it work?
It’s a sweetener from the bank for choosing them. You’ll sign a form with your lawyer, and the money usually lands in your account on or just after settlement day. Use it for legal fees, furniture — whatever you need. Be aware there is a clawback period if you decide to change banks later on.
Getting the keys is the most exciting part — but there are a few hoops to jump through first.
Do I get the money from the bank and send it to the lawyer?
Nope — the bank sends it straight to your lawyer’s trust account.
How will I know when I’ve settled?
You might spot your loan in your online banking first. Then your lawyer will call to confirm, followed by the real estate agent with key pickup details. Sometimes there’s a short wait while the vendor’s lawyer gives the green light.
What if I change jobs or take on new debt before settlement?
That could derail your loan approval. Best to hold off on any big changes until everything’s finalised.
This is where a mortgage broker really adds value for you.
Why does the online calculator say I can borrow $1M, but the bank says no?
Online tools use current interest rates. Banks use a higher “test rate” to check you could still afford repayments if rates rise. They also factor in things like rates and insurance. It pays to check with us about how much you can borrow — then you know exactly what you can start looking for.
How long will my loan run for?
We usually go for a 30-year term — it keeps repayments manageable. You can always pay it off faster with extra repayments or smart loan structures like offsets or revolving credit. Our mortgage advisers are wizards for working out your best debt strategy.
It’s not just about affording the house — remember to factor in some of these other important costs and protections.
What other costs should I budget for?
We also recommend:
Hopefully that’s been helpful! Any questions, feel free to reach out to me directly: suzanna@velocityfinancial.co.nz
Find out how much you can borrow and get pre-approved and make sure your KiwiSaver is on track!
This article was written by Suzanna and peer-reviewed by our financial advisory team.
Disclaimer: Suzanna is not a financial adviser. The above is generalised information that has been peer-reviewed by the Velocity Financial Advisory team. As always, before you make any financial decisions, discuss your situation with an adviser from Velocity Financial, and seek advice from professionals, such as a lawyer and accountant, to find the best solution for your unique situation.
Always get professional advice. The information shared in this post is meant to be a general guide to support you on your journey. When making important decisions about your finances, we encourage you to seek independent financial advice first, tailored to your unique situation. As well as talking with a financial adviser, make sure you talk to your lawyer and accountant too – together they'll help you find the best solution for your specific situation. Our knowledgeable financial advisers are here to help. Check out our website for the details about our financial advisory services in our disclosures: https://www.velocityfinancial.co.nz/disclosure-statement.