That Home Loan Hub
Welcome to That Home Loan Hub, your ultimate guide to mastering the world of home loans and property. I'm Zebunisso Alimova, here to simplify the complexities of real estate and provide you with expert insights and the latest trends.
Whether you're a first-time homebuyer, an experienced investor, or simply curious about the property market, this podcast is for you. Join me each week as we unlock the secrets to property success and help you make informed decisions. Let's dive into the world of property together!
That Home Loan Hub
Unlocking Your KiwiSaver: The Hidden Trade-offs for First Home Buyers
Facing the KiwiSaver dilemma? You're not alone. The question of whether to use your retirement savings for a first home deposit or preserve them for your golden years is perhaps the most consequential financial crossroads many Kiwis will face.
As your mortgage advisor who promises honesty over comfort, I'm diving deep into this complex decision. After three years of KiwiSaver contributions, first-home buyers can withdraw almost their entire balance (minus $1,000) – often forming their only substantial deposit source. But this convenience comes with significant long-term implications.
The mathematics of compound growth means withdrawing at 30 or 35 potentially sacrifices hundreds of thousands in retirement funds. Yet simultaneously, delaying property purchase while house prices continue climbing creates its own financial penalty through lost equity growth and continued rent payments. So which investment typically performs better – KiwiSaver or home equity?
Through real client stories like Natasha's clever strategy of using KiwiSaver for her deposit then boosting contributions from 3% to 8% post-purchase, we explore practical approaches that balance immediate housing needs with future financial security. Before making your decision, ask yourself critical questions: Are you emotionally and financially ready for homeownership? Are you confident in the property's quality and location? What's your plan to rebuild retirement savings?
Remember there's no universal right answer – only the right answer for your specific circumstances. Whether you use KiwiSaver for a home deposit or preserve it for retirement, having a deliberate strategy matters more than simply waiting and hoping. Ready to make this decision with confidence? Let's talk about your unique situation and find the path that builds your future, not just buys a house.
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Should you use your KiwiSaver for your first home or keep it for retirement? The real-life pros, cons and what most people don't know before they withdraw. Kia ora and welcome back to that Home Loan Hub. I'm Zibunisa Olimova, your go-to mortgage advisor, mom of four and the person who'll always tell you the truth, even if it's not what you expected to hear. Today we are diving into one of the biggest financial questions facing first-home buyers in New Zealand. Should I use my KiwiSaver to buy a house or should I leave it for retirement? There is no one-size-fits-all answer, but I'll walk you through the pros, the risks and a few client stories that might help you figure out the right one for you. Now remember this is not a financial advice, so for anything personalized, please go and see a financial advisor. Now. Number one what can you actually use KiwiSaver for? If you've been contributing to KiwiSaver for at least three years, you can withdraw most of your balance to use for a home deposit. You've got to leave $1,000 behind, you must live in that property and you can't have owned a property before, unless you qualify as a second chance buyer under certain criteria. In short, kiwisaver is often the biggest or only deposit source for many first home buyers. But here is where it gets tricky. The big trade-off house now versus retirement later. Yes, using your KiwiSaver might help you buy now, but it also reduces the amount growing for your retirement later. That money is invested and compounding and withdrawing it at age 30 or 35 means potentially missing out on hundreds of thousands in future growth. But you know what else matters Getting into the market early, because if house prices keep rising and you stay renting for another five to 10 years, that's also affecting your long-term financial future. So the real question becomes which investment will grow you more, your KiwiSaver or your first home equity? Now let's look at the case study Use now, rebuild later.
Speaker 1:Let me tell you about Natasha. She was 31, earning $82,000 and had $54,000 in her KiwiSaver. She wasn't sure whether to withdraw it or keep saving for another few years. We looked at the numbers and realized she could get into a small two-bedroom unit and up a hut. Now, with the help from the first home loan, she could stop renting and start building equity. And here's the key she could increase her KiwiSaver contribution from 3% to 8% after buying the house. That strategy gave her the best of both worlds a home now and a boosted retirement fund going forward.
Speaker 1:Now what to think about before you withdraw, before you touch your KiwiSaver? Ask yourself am I emotionally and financially ready to buy, or just rushing to use KiwiSaver because I can? Will I have any funds left in my KiwiSaver after the withdrawal? Am I confident in the property I'm buying Vacation, quality, long-term growth? What's my long-term plan to rebuild, retirement saving? And please don't just blindly withdraw it. Talk to your provider, your advisor, hey, and even your accountant. This is a big financial fork in the road.
Speaker 1:What if you don't use a KiwiSaver? Now let's say you want to keep your KiwiSaver untouched. That's not a bad thing, especially if you have other deposit sources like savings or family help inheritance. You're investing outside of KiwiSaver. So you've got shares or business you plan to buy with a partner who is using their Kiwi saver. You're building in a location where capital growth is slow and the return might not outweigh Kiwi saver performance. Look, there is no shame in playing the long game. The key is to have a plan either way, not just wait and hope.
Speaker 1:Final thoughts from me. Your KiwiSaver is a powerful tool, whether you use it for your first home or for retirement. There is no one right answer, but there is a right answer for you and if you're not sure what that looks like, I'd love to help. We'll run the numbers, weigh your options and make a decision that feels right, not rushed. Thanks for tuning in into that Home Loan Hub. If you found this episode helpful, hit, follow, share it with a friend or flick me a message with your KiwiSaver questions, because buying a house is one thing, but building a future, that's a real game. Talk soon.
