Saving A Deposit

The first step to saving your deposit is figuring out how much you need. This will be determined by two main factors - the amount that you are able to borrow and the percentage of the purchase price that you are required to have up front.

Once you have an indication of how much you may be able to borrow you can work out the percentage that you need for a deposit.

The great news is that SBS is a First Home Loan lender, which means that if you meet the eligibility criteria you will only need a 5% deposit to buy your first home! Don't worry if you don't qualify for the First Home Loan, the Residential Home Loan is also available to First Home Buyers with a 20% deposit.

If you’re a maths whizz you should now be able to do the percentages in your head - otherwise check out our Home Loan Calculator to figure out how much you should aim to have for your deposit.

Residential lending and eligibility criteria, T&C’s apply. $250 Application Fee, a 1% FHL Premium Fee for First Home Loans and additional credit fees and charges apply. FirstHome Combo T&C’s also apply.

Now that you have a goal for your deposit, it's time to look at what you already have. You may already have savings available that can be used for your deposit, such as:
 

- Savings Accounts
- KiwiSaver Funds
- Investments

Remember that investments may have break costs if you withdraw funds early, and you must leave a minimum of $1,000 in your KiwiSaver account when withdrawing funds for your deposit.

Sit down and add up all your savings to get your existing balance - your first home deposit may even be closer than you thought!

As a first home buyer if you've been making regular KiwiSaver contributions for at least three years, you may be eligible for a First Home Grant of up to $10,000 through Kāinga Ora.

If you buy an existing home and have paid into your scheme for at least 3 years, then you can get $1,000 per year you've paid into the scheme up to a maximum of $5,000 for five or more years. If you buy a new home or land to build on and have paid into your scheme for at least 3 years, then you can get $2,000 per year you’ve paid into the scheme up to a maximum of $10,000 for five or more years.

If you are planning on buying your first home within the next 6 months you can apply for pre-approval from Kāinga Ora for the First Home Grant. Applying for pre-approval will help you be certain of how much you're eligible for and will help speed up the process once you have found your home. If you're planning to use the First Home Grant as part of your deposit, we'll also require confirmation of pre-approval before we can pre-approve your finance.

To apply for pre-approval you need to complete the First Home Grant Application. Once you have pre-approval for the First Home Grant it's valid for six months – if you don't buy a home in that time you'll need to reapply. Once you've found a home you then simply need to provide Kāinga Ora with the relevant documents at least two weeks prior to the settlement date - this is something your solicitor should be able to help you with.

With the rising cost of house prices many first home buyers are receiving financial support from their families in buying a home.

If you have a family member that would like to help with your deposit they will need to officially "gift" the funds to you.

When gifting funds, the person making the contribution will need to sign a Gifting Declaration form. This form confirms that the funds are not a loan, you're not required to pay them back, and that the funds will be deposited into your bank account in time for settlement.

If you're planning on using gifted funds as part (or all) of your deposit, you will need to give a signed declaration to your lender before pre-approval is granted.

It’s time to set your savings goal! Your savings goal should be the amount you need for your deposit, less any existing savings or grants that you have access to.

It's important to remember that you’ll also need additional savings for lawyer fees, moving costs, buying appliances, stocking the pantry and all the other hidden expenses of the home buying process, so make sure you have a buffer to cover these (remember you could use your SBS Cash Contribution to help with these).

Once you've decided how much you need to save it is time to figure out how much you can afford to put aside each week and how long it will take you to reach your goal. Remember: It’s important to be realistic about what you can afford to put aside each pay, while still being able to enjoy the day to day. We all need a night out with friends or a weekend away every now and then!

Working to save for a deposit is great, but having your savings working for you? Even better!

To help you reach your deposit goals even sooner you might like to consider opening a savings account. Having a separate savings account for your deposit funds is an easy way to separate your money from your everyday account.

To help decide whether a savings account is right for you, check out our savings accounts here and save smarter, not harder.

Without a plan achieving a goal is tricky, whether it’s running your first marathon or buying your first home. That’s why you should look to create a budget to help you achieve your savings goals. Check out the advice from our expert on how to create a budget here.