‘Pay no interest’ to fight first home buyers’ plight

‘Pay no interest’ to fight first home buyers’ plight

The New Zealand Herald’s ‘Home Truths’ housing series has revealed Auckland house prices are now greater than Sydney’s.

House prices were now at 10 times median income levels (with three times being the accepted benchmark).

Experts say lack of access to housing because of inflated prices will hit birth rates, and single people, even those with substantial savings, can’t get into the Auckland property market.


Uphill battle

“The plight of the first-time home buyer is well known,” Simon Power, Westpac’s General Manager, Consumer Banking & Wealth, says.

“When you are buying a house, you have to have a builder’s report, you research and pay for different pieces of information and you pay for a valuer’s report – then you attend an auction and miss out. So all that money you’ve spent is dead money.

“In Auckland, 60% of houses are sold by auction, 15% in the rest of the country – it’s a difficult process.”

Power said Westpac’s research showed the areas of growth for first-time buyers in Auckland were in Waitakere and South Auckland with other main centres, including Hamilton, also showing growth.

“Hamilton just gets closer and closer to Auckland every time you make that drive,” he said. “There are other areas of growth too – Manawatu and the outskirts of Christchurch where first home buyers are growing in number and some Aucklanders are making the shift.”


Would paying no interest help?

With the housing market at such a dramatic pitch, especially regarding affordability in Auckland for first-home buyers, Westpac has announced a ‘pay no interest for a year’ home loan prize draw.

The campaign will allow four first home buyers who apply to Westpac for a first home loan between May 23 and July 31, 2016 to pay no interest for a year on their home loans.

“The property market has been a huge bone of contention in recent times and the genesis of this campaign was when we began wondering how we could help,” Power says.

“It was also an acknowledgement that an institution of this size should be thinking of things and looking at things through our customers’ eyes.

“We are not just lenders of money. We want to be able to help our customers through different stages of their lives, through different products and services – like getting your deposit together, enlisting family help, education, KiwiSaver and retirement.”

The four prizes will be worth in total a little under $100,000 – with Westpac ‘shouting’ each winner about $23,500 in interest, based on an average loan size of $500,000 at 4.7% per annum. The maximum individual prize value is $32,900 on a $700,000 loan which, with a deposit, would enable the borrower to buy a median-priced home in Auckland.

To find out more about your chance to win your home loan interest paid for a year, visit www.Westpac.co.nz/paynointerest


Entry criteria

Getting in the draw is easy as, all you have to do is:

  •     Be a first home buyer.
  •     Be planning to buy a home to live in.
  •     Get a home loan approved (including conditionally approved) between 27 May and 31 July 2016.

There will be 4 random prize draws, with one winner per draw on Wednesday 15 June 2016; Wednesday 6 July 2016; Wednesday 20 July 2016; and Wednesday 3 August 2016.

The winners will need to buy a house to live in (and not for property investment) within six months of approval and draw down the loan within nine months of approval. 

The winners will still need to meet standard home loan lending criteria and make the minimum principal repayments. 


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