Hawke’s Bay first-home buyers have borrowed more than $140 million through the Welcome Home Loan scheme since it began.
Housing New Zealand figures show 736 first-home buyers in Hawke’s Bay were granted a total of $142,963,000 in loans since the scheme launched in 2003. The average loan was $194,243.
As of May 31, more than $14 million had been lent to 73 local first-home buyers this financial year.
Welcome Home Loan is a scheme run by Housing New Zealand to help first-home buyers secure loans. Prospective buyers can borrow up to 90 per cent of a property’s value. Selected banks and credit unions loan the money.
To qualify for the 10 per cent deposit loan, borrowers have to have earned less than $80,000 in the previous 12 months as an individual, or $120,000 as a couple.
Borrowers must intend to live in the property rather than buying it as an investment.
Financial Advice Hawke’s Bay co-director Paul Sewell said the loans were an excellent way for home buyers to get into the market.
“They’re a powerful tool to assist those who might not be able to otherwise buy their first home,” he said. “They also help those who are to buy a home to get into the market earlier.”
KiwiSaver also fed well into the scheme, he said.
“Cashing in on KiwiSaver can be a great way to make the 10 per cent deposit.
“If a Hawke’s Bay couple on $50,000 each contribute to KiwiSaver for five years, they could potentially have $15,000 to $20,000 each to contribute to a deposit.”
Welcome Home Loan’s house price cap in Hawke’s Bay is $350,000.
Price caps vary for each region, with the highest of $550,000 in Auckland. The rest of the country is capped at between $350,000 and $450,000.
Roost mortgage broker Paul Richardson also said the loans weren’t one-size-fits-all.
“It’s positive that they can help people get around the Reserve Bank’s [loan-to-value ratio] restrictions but, like anything the Government does, there’s rules and restrictions,” he said.
“The price caps may have gone up but it’s still proving hard for a lot of people to get into their first home.”
Nationwide, more than $2.4 billion has been lent to more than 12,000 first-home buyers.
As of May 31, more than $220 million had been lent to 965 buyers this financial year.