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First Home Buyers

Buying your first home and arranging the home loan can be time consuming and confusing. To make the process easier we have put together a step by step guide below on how you can successfully get approval of home loan to purchase your first home.
Ready youself for house hunting
Ready youself for house hunting

The first step towards purchasing a new home is to save a deposit that you can put towards the purchase. Generally, banks prefer to see at least 5% deposit. This means 5% of the total house purchase price has come from your own savings which you have saved over a period of time.

Apart from the 5% deposit which should be your own savings, the remaining deposit can come from the following sources which are acceptable to the banks:
  1. Your KiwiSaver contribution (you are allowed to withdraw your KiwiSaver contribution if you have been contributing towards KiwiSaver for at least 3 years).
  2. Housing New Zealand Subsidy (you are eligible if are a first home buyer, have been contributing to KiwiSaver, and your house price is below $485,000) – Refer to Housing New Zealand rules.
  3. Money gifted by a family member, relative, or friend.
  4. Money is given by a family member, relative or friend by using the equity in their property.
  5. Money from the sale of your previous property.

A large deposit can provide you the following advantages:

  • Easier to get home loan
    Having a good deposit shows that you have a strong savings history. This is what lenders prefer when giving someone a home loan.
  • Save on monthly repayments and interest
    The bigger your deposit, the less you have to borrow, and that means lower monthly repayments. A large deposit will help you to repay the loan quicker and pay less in interest charges.
  • Your choice of lenders and a lower interest rate
    Having a bigger deposit gives you a wider choice of lenders and could help you to negotiate a lower interest rate.
  • Reduce Low Equity Fee
    If your deposit is less than 20% of the property’s value, you have to pay Low Equity Fee to the bank. This fee is typically between 0.5-2% of the home loan you’re applying to take from the bank and depends on your deposit. A bigger deposit close to 20% can keep the low equity fee to a minimum.

When you’re buying a new home, the house itself is not the only cost you will incur. There are other costs that you need to be aware of and factor into your budget from the beginning of the process.

Common costs you may run into you get the keys to your dream home:

Building inspection

Before you make the final decision on purchasing your new home it’s wise to have a building inspeciton done. A building inspection may show up:
  • Building defects - like leaky buildings
  • Illegal work
  • Pest issues

Generally a building inspection will cost around $500, but could save you thousands of dollar down the line.

Home Loan Costs

Your lender may charge some upfront loan costs such as: 
  • Loan application fee
  • Low Equity Margin fee: if you are putting less than 20% deposit, banks charge 0.5-2% of the loan amount in low equity margin fee. Some banks charge this fee upfront and other banks add it on top of the regular interest rate your mortgage instalments will be based on.

Valuation Costs

If you pay less than a 20% deposit towards the purchase price or are purchasing a property directly from the seller without involving a real estate agent, banks will ask you to get the property valued. This valuation needs to be completed by a registered valuer. Generally, valuation costs can vary between $500-$600.

Legal fees

You’ll need to engage a solicitor to explain to you your rights before you accept the loan and sign on the dotted line with the bank.

Once you’ve bought a home the costs don’t end there, you will need to be prepared for these costs:

Moving in costs

When you're ready to move into your new home you'll need to pay a number of costs. These include furniture removal, utility connections - gas & electricity, telephone, internet, council rates and water rates.

Home and contents insurance

A must-have that protects your largest asset. If your home or belongings are damaged by fire, storm, earthquake and in some cases, flood, or you experience loss through burglary you’re home and contents insurance will help you to recover your losses.

Working out your borrowing power is an important step when looking at buying your first home. It helps you to narrow down the property search and allows you visualize what the financial commitments of a mortgage will be.

Your borrowing power is typically based on the following:

  • Income
  • Debts
  • Financial commitments
  • Credit history
  • Loan type
  • Employment history
  • Savings
  • Family size
  • Assets
  • Residency status

Start forming a budget

You need to work out what your day to day living costs are and what you will be able to save after paying these expenses as well as a mortgage repayment. Ideally, this should serve as a guide on how much you should borrow rather than how much you can borrow.

Prepare for the unexpected

Once you know how much you should borrow, you need to factor in potential events such as interest rate rises, work changes or additions to your family to allow for a financial buffer. Ideally, you should still be adding to your savings after paying for all your living expenses, day to day bills, and mortgage repayments.  

To see what you can afford to borrow, enter your details into our mortgage calculator.

The most important thing banks see when giving the home loan is your income which shows your ability to repay the loan and how much you can afford to borrow.  

Banks consider the sources of income listed below as potential income(s) when assessing your home loan application.

Salary or Wages

Your annual gross salary which will be verified from your payslips.

Business Income or Contract Income

If you are self employed or run a business, banks want to see at least 2 years of financial statements prepared by an accountant to see the net profit your business makes.

If you are on a contract, banks are keen to see your contractual agreement to see the length of your contract (ideally this needs to be at least one year) and the income you will earn from the contract.

Rental Income

If you are going to rent out the property you are purchasing, banks will ask for a rental appraisal from a real estate agency to determine the rental income the home will generate.

Boarder Income

If you are going to rent out the rooms in the home you are purchasing to someone (boarder) and live in the same home, bank will ask for a letter signed by the boarder confirming their intent to stay and how much rent they will give you on a weekly basis.
Commission/ Bonus/ Overtime

If you are paid a bonus or commission in your job, banks want to see at least 2 years of income summary to ensure that you are paid the bonus or commission on a consistent basis.

Superannuation / IRD Accommodation Supplement / WINZ Benefit

Just because you are retired, not working, or have less income, doesn’t mean bank will not give you home loan. Banks consider NZ Superannuation, WINZ Benefit, IRD Accommodation Supplement, and Working for Families credit as potential sources of income when giving a home loan.

While you are busy house hunting to find your dream home, it is important to understand the home loan application process to ensure your paperwork is correct and you know exactly how much bank is willing lend you. While the home loan application process varies from bank to bank, there is a general series of events that you should expect.


When you’re house hunting, you need to work out in advance how much you can borrow from the bank. This will ensure you’re looking for a house within your budget as well as providing you a realistic goal to work towards. You should also investigate your eligibility for any first home owner grants and incentives. We’re here to help you with the pre-approval process so that you’re approved for the maximum amount you can afford..

Home loan application

If you need home loan to buy your home, you’ll need to submit a loan application with the banks. We’ll assist you with the lodgement process and help you organise the necessary paperwork that goes along with the application.

Bank approval process

The bank assesses your application along with the submitted paperwork, which generally takes 3-5 working days. The bank then provides their response and you may receive conditional approval. This means the application is approved in principle, but is subject to further paperwork being received (usually a sale and purchase agreement as well as a property valuation).

Sale & Purchase Agreement

Once you have found your dream home, you need to put an offer on the property either through auction process or private negotiation and sign a sale and purchase agreement. A copy of the contract or agreement containing your property’s details needs to be submitted to the bank to ensure bank is happy to lend you the money against the property.

Property valuation

If you are contributing less than 20% deposit, the bank will request  you to provide a valuation report  from a registered valuer. This is usually organised in around 3-5 business days subject to availability of the valuer and the property for inspection.

Unconditional approval

Finally, the bank will give an unconditional loan approval. This is the green light to go ahead with the loan. We’ll give you the good news so you can start the preparations for moving into your new home

Organise the Paperwork
for Home Loan
Organise the Paperwork
for Home Loan
When assessing your eligibility for a home loan and how much you can borrow banks will need these documents from you.

Evidence of Deposit

Banks require that at least 5% of the deposit towards the purchase of the house needs to come from your own savings. You will need to provide latest 3 months bank statement of accounts where your savings or term deposit is sitting.

Confirmation of Income

If you are employed, banks will ask for your 3 most recent payslips to confirm your income. If you have been in your current employment for less than 3 months, the bank will ask for a copy of your employment contract to ensure there is no probation period. If part of your annual income comes from bonus or commission, regular overtime or on-call time, your bank will want to see 2 years of IRD Summaries to confirm you have been consistently earning above your base salary.
If you run a business or are self-employed banks will ask last 2 years of financials (profit & loss and assets and liabilities position) for your business. This needs to be prepared by a chartered accountant in order to confirm your annual income.

Account Conduct

Before banks lend you the big money, they would want to make sure that you have been good in dealing with handling the small amounts. To ensure your account conduct has been good, bank will ask you to submit 3 months of bank statements for the account(s) where your income is deposited into and from which expenses withdrawn.

ID Verification

Banks will ask you to submit a copy of your passport along with the residency page to ensure you are entitled to receive a loan from the bank.

Sale & Purchase Agreement

When you have found your dream home, banks will ask you to submit a copy of the signed sale and purchase agreement so they know the house you are purchasing and can assess whether they are safe to lend against the house.
Ask Bank for Home Loan
Ask Bank for Home Loan

When you’re house hunting, you need to work out in advance how much you can borrow from the bank. This will ensure you’re looking for a house within your budget, it also provides you with a realistic goal to work with.

During this stage we work with you to investigate your eligibility for any first home owner grants and incentives. We’re able to assist you throughout the entire pre-approval process so that you can explore all of your options.

Search Your Ideal House
Search Your Ideal House

Considering all aspects of your future home

When searching for your dream home, do not limit your focus to checking out interior and exterior of the house. You’ll need to take many other issues into consideration when making your final decision.

You should consider the following:

  • Neighbours
  • Transport Facilities
  • School Zones and Nearby Schools
  • Nearby amenities such as parks, supermarket, shops, restaurant, medical centres, hospitals
  • Local traffic levels
  • Parking availability
  • Flooding Zone
  • All construction in the house is authorised
  • Developments planned for the nearby area (talk to the local council about this)

It pays to visit the property and surrounding area at different times of the day and observe what's happening. The last thing you want is one of these factors affecting your quality of life once you’ve moved in.

Make an Offer on the House
Make an Offer on the House
Now that you have found your dream home, it is time to put an offer on the property and close the deal. 
Finalise the home loan from the bank
Finalise the home loan from the bank

Now that you’ve satisfied the conditions established by the bank at the time of the pre-approval, such as providing a copy of the sale purchase agreement, valuation report, building inspection report as well as a rental appraisal (if it’s an investment property) the bank will give you the green light to go ahead to start preparing to take over your new property.

At this point,  the bank will offer you their terms and conditions for the loan. These will include interest rates, term of the loan, indicative loan repayments, and any cash contribution to cover off the legal and other expenses that you’ve incurred so far.

Choose the right home loan options
Choose the right home loan options

Structure Your Mortgage The Right Way

This is the most important step in the entire process.The structure of your loan will determine how long it will take you to completely repay your loan. This is also where you can compare the deals from various banks to see whether you’re getting the best deal available.

During this stage, we assist you by:

  • Helping compare the deals from multiple banks to ensure you choose the bank which is giving you the lowest interest rate, maximum cash contribution, and greatest flexibility in loan structuring.

  • Advising how you should break your loan into fixed and floating. In addition we look at what proportion of your loan should be fixed, given the predicted interest rate movement. This helps you avoid paying unnecessary interest to the bank, which can then be used to help repay your loan faster.
  • Assess your current and future financial goals and situation to help you decide whether it pays to increase the loan instalments right from the start or pay a lump sum when the fixed portion of the loan comes to maturity.
  • Show you how quickly you could be able to repay your loan and how much you can potentially save in interest repayments that the bank would have otherwise taken over the course of a 30 year loan term.
Start the preparations for moving in
Start the preparations for moving in

Now that your mortgage is all sorted, the excitement will be building as the day you move into your new home inches closer. You need to start packing your bags and getting ready to move. In between moving out from your current house and moving into the new house you should plan and organise the following:

  • Notify the following to cancel the delivery or about change in address from the date you will move in the new property:
  • Cancel newspaper delivery
  • Notify Internet, Mobile, Landline, Electricity, Water companies about your change of address
  • Notify banks and credit card companies about your change of address
  • Inform local post office about redirection of mail mail
  • Notify insurance companies (car, life/health, contents) about your change of address
  • Inform your friends, relatives, GP
  • Additionally you should organise or take these steps before moving in:
  • Arrange from a furniture removal company to move the contents of your house.
  • See your solicitor to sign bank loan documents to ensure smooth transfer of property in your name on settlement date.
  • Advise your children’s school that your children are leaving and enrol children in the new local school.
  • Organise home insurance for the new home prior to moving in
  • Pack your house contents in boxes and label the boxes to assist with unpacking.
  • Organise newspaper delivery, telephone, internet, gas, electricity, and water connectivity for the new home.


  • Mortgage Brokering
  • Mortgage Restructuring
  • Insurance Brokering
  • Annual Mortgage and Insurance Review
  • Calculators

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Kudos Business Centre,
19-22/203 Kirkbride Rd,
Airport Oaks,
Auckland, New Zealand 2022