Busting the 20% Deposit Myth

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Kia ora , and welcome to another episode of that Home Loan Hub . I'm Zibunisa Alimova , mortgage advisor , mom of four and someone who's walked the home ownership journey with hundreds of Kiwis , just like you . Today I want to bust a myth that holds so many people back I need 20% deposit to buy a home , not true ? Let's talk about low deposit home loans , what your real options are are and how to make them work for you . What is a low deposit loan ? A low deposit loan means you're buying a home with less than 20% deposit . Traditionally , banks wanted buyers to have 20% saved . That's $120,000 for a $600,000 home , which can feel impossible for many first-home buyers . But in New Zealand there are actually pathways to buy with as little as 5% to 10% deposit .

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Let me break it down to you how Kayanga Ora's first home loan scheme . If you've never heard of it , tune in closely . Kayanga Ora offers something

Understanding Low Deposit Options

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called a first home loan , where pre-approved lenders allow you to buy with just 5% deposit . The catch there are income caps and sometimes property value caps , and you must meet certain eligibility criteria . So , as of now , your household income must be under $150,000 combined , or $90,000 for an individual . You must live in a home , so no rentals and you can't already own a property If you qualify . This is a fantastic starting point and I help clients access this all the time .

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Banks that loan with less than 20% deposit . Now , many major banks will still consider applications with 10% deposit , but there are a few things to know . You will likely need to pay lender mortgage insurance , so low equity premium Interest rates might be slightly higher . The banks will look harder at your income , debts and spending habits so it's doable , but you'll need a clean . Harder at your income , debts and spending habits so it's doable , but you'll need a clean , strong application . This is where having a mortgage advisor really helps , and there is one , currently a major bank that offers a loan with as little as 5% deposit .

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Now , non-bank and second-tier lenders If you don't qualify through Kyanga , aura or the bank says no , there is still hope . Non-bank lenders , also known as second-tier lenders , are more flexible on things like credit history , income type and deposit size . Yes , interest rates can be higher , but often this is a short-term strategy to get you into the market . You can refinance later , once you've built some equity . And what's the catch ? You'd say . So let's be honest Buying with a low deposit has some risks Higher repayments due to a bigger mortgage , less buffer if the market dips and you

Navigating Lender Requirements

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have to sell Extra fees or premiums or margins . But the upside you get into the market sooner you stop paying rent and you start building wealth through home ownership .

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The key is being financially prepared and having a clear plan . I've got a case study for you here . Let's have a look at a client's story from 8% deposit to a first home . I had a single mom come to me with an 8% deposit . The banks went interested . She had a good job but didn't like her short work history . We worked with a non-bank lender , tidied up her budget and within three months she was holding the keys to her own home in Levin . Six months later we managed to refinance her with a mainstream bank at a better rate . And that's the kind of journey a low deposit can start if you know your options .

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So I've got some tips for you as well today . Tips for making it work . Start budgeting early . Banks love to see consistent saving . Clean up your credit . Even small defaults can affect approvals . Talk to an advisor

Real Client Success Story

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early , even if you think you're not ready especially if you think you're not ready . And then consider location flexibly . Look beyond your dream suburb to get started , because remember , your first home is not your forever home . And my final thoughts for you today don't let the 20% deposit myth hold you back . Yes , it's ideal , but it's not the only way . With good advice , realistic planning and the right lender , you can buy with less , and I'd love to help you figure out what's possible for your situation . That's all for today on that Home Loan Hub . If you found this episode helpful , share it with a friend , leave a review or reach out for a chat . I'm

Practical Tips and Final Thoughts

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always here to support your home ownership journey . Until next time , stay hopeful , stay prepared and don't stop dreaming .