One-off visa nearly approved: can you buy a home with a 10% deposit?!

Armed with a long list of questions collected from readers, YIJU’s editorial team interviewed a senior mortgage broker at Plaxo Mortgages. Questions are welcome—come and get the answers you need!

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My One-off visa application is still being processed.

Can I apply for loan pre-approval first?

 

While waiting for their One-off visa approval, many people are seeing house prices ease and interest rates rise, and are itching to buy as soon as possible.

 

However, more haste can mean less speed. Although banks can issue a pre-approval letter to applicants whose One-off visas are still being processed, until their visa is approved they can only buy homes available for purchase by overseas buyers. In other words, unless you can be sure of gaining residency and buying a home within 3 months, that pre-approval may be of little use—or even meaningless.

 

So is worrying all you can do while waiting for your One-off visa? Certainly not! Find a reliable mortgage broker who can use your basic information to provide a comprehensive borrowing assessment and loan plan. You can then prepare your deposit based on the assessed borrowing amount and gather all the necessary loan documents while waiting for residency approval. Once your One-off visa is approved, you can immediately ask your broker to arrange pre-approval and move quickly to secure the home you want, saving considerable time.

 

Quick explainer

What is loan pre-approval?

Loan pre-approval is written approval from a bank outlining how much you can borrow, or the loan amount, and any specific conditions. Note that pre-approval generally does not include a mortgage interest rate or cashback offer. These can only be negotiated and confirmed once you have found a property acceptable to the bank and met all the specified conditions.

 

What are the specific conditions?

These generally require the borrower’s financial circumstances to remain consistent, their employment to remain stable, and the property to meet compliance requirements, among other things.

 

What if my pre-approval expires?

Don’t worry. Contact your mortgage broker in advance and submit the required documents to arrange an extension.

 

What documents do I need for loan pre-approval?

 

Once you have found a suitable mortgage broker, you can prepare the loan documents they require.

 

When you apply for a home loan in New Zealand, lenders generally consider two main factors: how much deposit you can contribute, and your ability to repay the loan over its term, usually 25–30 years. This involves calculating your income and expenses. You therefore need to prepare the following documents to demonstrate your repayment capacity:

 

Identification: Your passport and visa page

Proof of income: The past three months’ PAYE earnings, or the past two years’ financial statements for self-employed applicants

Bank statements: Three months of bank statements showing everyday spending, the account summary page, and, if you have other loans, statements for those loans covering the past six months

Credit card statements, if applicable: Statements for the past six months

Evidence of the source of your deposit: Evidence of savings, parental contributions or KiwiSaver funds, for example.

 

These are the most basic requirements for a home loan application. The specific documents needed will depend on each client’s circumstances.

 

 

 

Will tighter bank lending have a major effect on my purchase of an owner-occupied home?

 

Although the Reserve Bank of New Zealand raised the Official Cash Rate, or OCR, as the industry predicted, tighter bank policies will in fact have a relatively limited impact on first-home buyers and people with stable wage or salary income. These borrowers have always been among the banks’ preferred customer groups.

 

ANZ, New Zealand’s largest home loan provider, reopened applications last month for mortgages with deposits below 20% (LVR 80%). Kiwibank, which also stopped lending to borrowers with deposits of less than a fifth last November, has resumed approving low-deposit home loans and says it will prioritise existing customers and first-home buyers. Westpac has followed suit by reopening low-equity lending, also known as high-LVR lending, giving buyers preparing to enter the market more opportunities.

 

These moves clearly show that bank policies are shifting in favour of first-home buyers. We believe and hope that other major banks will gradually follow and develop lending policies better suited to market demand.

 

Quick explainer

What is Plaxo’s “White-collar Home Loan”?

Plaxo’s “White-collar Home Loan” is a home lending service designed specifically for wage and salary earners. Drawing on nearly 15 years of industry experience, Plaxo Mortgages has analysed employees’ income patterns to tailor the most suitable home loan plans for professionals in different occupations and with different income structures.

 

“White-collar Home Loan”: who is it for?

Who it suits: wage and salary earners looking to buy their first owner-occupied home or an investment property.

• If you have recently received or are applying for a One-off visa, have a permanent occupation and stable income, such as an annual salary or hourly wages, and are considering buying your first owner-occupied home in New Zealand, Plaxo’s “White-collar Home Loan” is your best choice.
• If you have been settled in New Zealand for some time, saved towards a deposit and want to establish your own family home, or want to upgrade your current home and are considering an investment property for the future, Plaxo’s “White-collar Home Loan” is your best choice.

 

 

 

Can I still hope to buy a home with only a 5% deposit?

 

The answer is, of course, yes!

 

Many of you will have seen this news over the past couple of days: the New Zealand government has introduced First Home Partner, a shared home ownership scheme. If a first-home buyer’s deposit plus bank home loan is insufficient to buy an owner-occupied home, the government, through Kāinga Ora, can contribute up to NZ$200,000 or 25% of the purchase price, whichever is lower, to help you buy!

 

Put simply: home loan + government assistance + your deposit = your new home.

 

Quick explainer

What conditions must I meet to apply for First Home Partner assistance?

• Buyers must have a deposit of at least 5%.
• The home must be a new build.
• The buyer’s total household income before tax must be below NZ$130,000.
• Buyers must be first-home buyers, or currently own no home and have realisable assets worth no more than 20% of the house price cap for the area where they are buying.

 

Apply at:

https://kaingaora.govt.nz/home-ownership/first-home-partner/apply-for-first-home-partner/

 

What should I do if my deposit is insufficient and I don’t qualify for First Home Partner?

 

This is when you need a professional mortgage adviser. New Zealand banks have different lending requirements, and their calculators treat different types of income and expenses slightly differently. These small differences can produce a substantial change in the loan amount. The loan amount and preferential policies available also vary according to each person’s circumstances. So even if you do not qualify for government assistance, you may still qualify for a bank’s first-home buyer offers, such as a 10% deposit. Consulting a mortgage adviser is therefore the best way to address an insufficient deposit.

 

If I already understand lending policies to some extent, should I apply through a bank lending manager,

or would a mortgage adviser be more suitable?

 

When planning to apply for a home loan in New Zealand, there are generally two common channels: a bank lending manager, or a financial adviser or mortgage broker at a mortgage company. You can choose according to your circumstances and needs.

 

In New Zealand, around 40% of home loans are arranged through mortgage advisers, and this figure continues to grow. The main reasons are:

 

Time costs: A mortgage adviser’s job is to help clients find the most suitable lending products across banks and financial institutions. Although banks’ interest rates and products may look similar, their lending calculations differ. Depending on the client’s circumstances, Bank A may offer a larger loan than Bank B, while Bank C may offer more cashback than Bank A. A professional can assess these trade-offs and details to find the most suitable loan plan, saving you time and making the borrowing process more efficient.

 

Funding costs: If you have multiple investment properties, commercial properties or business investments, a mortgage adviser can use their expertise to establish a more appropriate lending structure and find the financing arrangements best suited to you. The benefits can be long-lasting.

 

If I’m buying my first home and don’t understand lending policies,

how do I find a suitable mortgage adviser?

 

From a professional perspective, finding a reliable mortgage adviser means looking at the following:

 

Qualifications: are they properly certified?

New Zealand’s professional qualification requirements for mortgage advisers are continually rising. Before becoming a mortgage adviser, a person must obtain the required qualification to work legally and compliantly. Certification is only the starting point: to begin formally submitting applications to banks, advisers also need accreditation from each bank. Different banks have different accreditation requirements. Some require a supporting reference from someone with industry experience; others require the applicant to have relevant financial sector experience. Whether an adviser has obtained accreditation from each bank can therefore also help you assess their reliability.

 

For clients, choosing a mortgage adviser accredited by many banks means choosing someone with strong industry recognition. It also gives you more lenders to choose from and can make obtaining a loan relatively easier. Before a consultation, ask about the adviser’s scope of service and qualifications.

 

Experience and expertise

Mortgage advice is a profession that takes time and experience to develop. The longer advisers have worked and the wider the range of clients they have encountered, the more experience they accumulate and the better equipped they become to handle complex or unusual cases. Each client’s loan is tailored, rather than copied and pasted. Relationships with lenders, whether banks or finance companies, also deepen gradually through the company’s or adviser’s experience and expertise.

 

Reputation

A mortgage company’s or independent adviser’s reputation is extremely important. Lending involves a substantial share of a household’s wealth as well as private financial information, making the adviser’s or company’s integrity a key consideration. New Zealand’s Chinese community is small. Before choosing an adviser, ask friends and colleagues about their experiences.