The recent announcement by Housing Minister, Chris Bishop, regarding the scrapping of the First Home Grant has significant implications for prospective first home buyers in New Zealand. This programme, which offered up to $10,000 per person to assist with purchasing their first home, has been a crucial financial support for many buyers. Over the past decade it has helped nearly 87,000 New Zealanders take their first step onto the property ladder. However, the government has decided to end this programme, redirecting funds to other housing initiatives such as 1500 new social housing places.

If you have a current pre-approval or approval for the First Home Grant, this will still be honoured up until the expiry date on your approval.

While the First Home Grant is no longer available, you can explore other strategies to build your deposit and reach your goal of homeownership. Some of these strategies include:

• Talking to a mortgage broker

First and foremost, we recommend speaking with a mortgage broker, who can offer you valuable advice tailored to your unique financial situation. They know the policies of a wide range of lenders, can explain different loan products and can offer a personalized plan on how to increase your deposit.

• Explore your eligibility to withdraw your KiwiSaver funds

Even without the First Home Grant, you can still withdraw most of your KiwiSaver savings to put towards a first home deposit. Check in with your adviser and your KiwiSaver provider to see how much you’d be eligible to withdraw.

• Set up a dedicated savings account

Open a high-interest savings account or term deposit specifically to save for your first home. Make regular payments into this account to build your savings and benefit from compound interest. A great idea is to calculate how much your mortgage repayments (plus insurance and rates) would be and to save the difference from your current rent/board payments, which will help grow your savings and test to see whether you could sustain those payments long-term.

• Review your budget to reduce non-essential spending

Reviewing your budget and outgoings can give you more surplus funds that can be then directed into your home deposit fund. Small changes, such as cancelling unused subscriptions, can add up over time.

While the end of the First Home Grant does present an additional hurdle for first home buyers to overcome, it is also an opportunity to ensure you seek the right advice to ensure you are still able to achieve your home ownership dreams.

For personalised advice and strategies for increasing and building your first home deposit, get in touch with our team of experts at O’Hagan Home Loans and Insurances. We’ve navigated through many changes in the financial landscape over the last 30 years and we’re well placed to help you find the best solution to secure your first home in this current climate.

This post was written by

Simone Hojabri - who has written 5 posts