A new shared equity scheme unveiled by Kāinga Ora is set to provide an accessible path to home ownership for Kiwi families struggling to save a 20% deposit.
The First Home Partner scheme boosts Kiwis chances of buying their first home by combining a buyer’s five percent deposit with an equity contribution of up to 25% of the purchase price or $200,000 - whichever is lower - from Kāinga Ora.
They can then apply to Westpac for a home loan for the remaining portion (standard terms, conditions and eligibility criteria apply).
Westpac NZ worked with Kāinga Ora to help develop the scheme and its customers can apply from October 5, 2021.
Under the scheme, Kāinga Ora will take an ownership share of the home that is fee free for the first fifteen years and support the new household to purchase the share back over time and become full homeowners. The initiative is aimed at assisting first home buyers who can service a mortgage but need help raising their deposit.
Westpac NZ Acting General Manager of Institutional and Business Banking Andrew Bashford said the shared equity model has the potential to bring the home ownership dream within reach for many more Kiwi families.
“This is a great example of businesses working together with government to offer greater opportunities for our customers,” Bashford said.
“We know saving enough for a deposit is one of the biggest barriers to buying a first home.
“By contributing equity towards a home purchase, Kāinga Ora is giving customers a big helping hand, and we’re proud to have partnered with them on the framework to help make this possible,” he said.
Housing Minister Megan Woods says progressive home ownership initiatives enable people who might otherwise never have a chance, to own their own home.
“These changes mean more people will have that opportunity,” she said.
Kāinga Ora Director of Commercial Products Andrew Clapham thanked Westpac for helping develop the scheme.
“Getting more New Zealanders into their own homes will take a collaborative effort across government and business, and we appreciate Westpac’s time and effort in helping make First Home Partner a reality,” Clapham said.
“Westpac has helped first home buyers into 3,245 homes in the six months to the end of August – a 26.5% increase on the same time last year – and we’ll keep looking for innovative ways to help,” Bashford said.
“We continue to support Housing Foundation shared equity schemes, and we’ve worked with iwi partners to help dozens of whanau into new homes. Another 200 customers are in brand new homes thanks to Westpac Prebuilt – a dedicated lending product for prefabricated housing, which can be faster and more affordable than traditional on-site builds.
“The First Home Partner scheme is another exciting addition to these options for first home buyers.
“Whatever their aspirations, we encourage Kiwis to come and talk to us about how we can help them get on the home ownership ladder,” Bashford said.
More information on the First Home Partner scheme can be found on Kāinga Ora’s website.