For many people, the exciting goal of buying a first home or moving to their next one feels like it’s still years away, and a 20% deposit is usually why. It’s not always the only way forward, and it doesn’t need to be the reason 'one day' never quite becomes 'now'.
That’s why it is worth knowing what options may be available before assuming a 20% deposit is the only path forward. For owner-occupied lending, NBS can lend eligible buyers up to 90% of the value of their new home. That option is available whether you are buying your first home or moving to your next one. For first-home buyers, NBS’ First Home Loan, in partnership with Kāinga Ora, can lend up to 95% of a property’s value. On a $500,000 home, that could mean the difference between finding a $100,000 deposit and finding $25,000 for eligible buyers. Criteria apply, so it is worth checking your eligibility before ruling yourself out.
“A 20% deposit is not always the starting point. The best thing people can do is talk to us early, because a deposit is only one part of a lending decision and there may be more options available than they realise,” says NBS Chief Client Officer Linda Sullivan.
“For first-home buyers and existing homeowners, the bigger question is what kind of home loan will fit the life they’re building,” says Linda Sullivan. “Fixed terms end, incomes change and sometimes what you need is simply more flexibility for a renovation, a big life event or some breathing room. Rate matters, but so does how well a loan can move with you.”
That is what NBS’ Residential Redraw Home Loan is built for. It’s a fixed-rate home loan that still lets you make extra payments and redraw funds when you need them, free of charge, up to twice a month. In New Zealand, that kind of flexibility usually comes through a revolving credit or variable-rate loan, and variable or floating rates can often carry a premium compared to fixed terms. NBS pairs the flexibility to redraw with a fixed rate, so you’re not paying a higher variable rate just to keep access to your own money, or to benefit from paying more on the principal of your loan.
Real income is not always neat or even. A self-employed tradie might have a strong summer and a quiet winter. A teacher might receive lump-sum holiday pay. “Under NBS’ Residential Redraw, extra payments like these count towards the loan balance and can be redrawn later, in line with the loan terms,” Linda Sullivan explains.
There’s another advantage to NBS’ Residential Redraw Home Loan that’s worth knowing about. Interest is charged on what you still owe, not what you originally borrowed, so every extra dollar on the loan stops accruing interest from that point. Put a $10,000 bonus onto the loan, and you stop paying interest on that $10,000 immediately. If you later redraw the money, the balance goes back up and interest starts again.
Whether you’re weighing up a first deposit or wondering if your current loan still works for you, the next step is a conversation with someone who understands the local market. At NBS, that conversation is not with a call centre and the decision is not made centrally. It’s made locally, by people who can explain your options in plain language and help you move forward with confidence.
“For us, lending is about the person and their situation, not just the numbers. Local conversations help people understand their options and make decisions with confidence,” says Linda Sullivan.
If you’re buying your first home, talk to the team at NBS about how much deposit you need and whether NBS First Home Loan eligibility could apply. If you already have a mortgage and want more flexibility, ask about the NBS Residential Redraw Home Loan and whether it could suit the way you live, earn and repay.
Exclusions apply to some property or loan types. A fee of 1.2% of the loan amount applies to Kāinga Ora First Home Loans. Terms and conditions, fees and lending criteria apply. Interest rates are subject to change at any time without notice.
Examples used in this article are illustrative only and do not constitute financial or lending advice. Talk to an NBS lending specialist about your own situation. Find out more at nbs.co.nz. NBS is not a registered bank