Changes for First Home Products

From 1 April 2021 the First Home Products income caps will increase and the house price caps will increase in targeted areas. This means more eligible applicants can access financial support to help them buy their own home.

More information on these changes is available on the Ministry of Housing and Urban Development website.

If I am turned down by a lender, will I get turned down by another lender?

Each lender can use slightly different lending criteria. You should talk to participating lenders about your individual circumstances.

What is the difference between a ‘vendor’ deposit and a ‘financial’ deposit?

The financial deposit is the amount that you need to contribute towards the purchase of the property. Most lenders require at least a 20% deposit. With First Home Loan, you need a 5% deposit. A vendor deposit is if the seller of the property requests an amount to secure the property prior to settlement. This normally sits with the real estate agent until settlement date. You cannot use a First Home Grant grant to pay a vendor deposit.

Is First Home Loan mortgage insurance?

No. First Home Loan is a form of ‘Lenders Mortgage Insurance’ which insures lenders against loss if a loan repayment goes into default. ‘Mortgage Insurance’ is a different type of insurance, that protects borrowers in the event that their circumstances changes, and the loan repayment goes into default.

What will a First Home Loan cost me?

Each participating lender will have their own interest rates and fees. One of those fees is to reimburse the lender for the Lenders Mortgage Insurance premium Kāinga Ora charges to insure each First Home Loan. The amount of this fee is 1% of the loan amount. This amount can be added onto the loan.

Do all First Home Loan lenders have identical requirements for the First Home Loan?

Not necessarily. Kāinga Ora sets the minimum criteria that participating lenders must met, but lenders are able to apply slightly different credit criteria, provided that they meet our’s as a minimum.

What happens if my circumstances change after I receive the loan?

If your circumstances change after you take out the loan you should speak to your lender about your changed circumstances. They will work with you to help you to continue to re-pay the loan.

Page updated: 17 October 2019