First home buyer price caps and insurance premiums get updated

The government has made a series of adjustments to the First Home Grant and First Home Loan that should make it easier for new buyers to enter the market.

There have also been some tweaks to the KiwiBuild scheme, which, again, are favourable for first-home buyers.

 

First Home Grant

Some house price caps have been increased to align with market values.

Also, the minimum new build house price cap has increased from $500,000 to $650,000. “This reflects the rising cost of construction and gives more eligible first home buyers a choice between buying an existing or new build home,” Housing Minister Megan Woods said.

These changes took effect on 15 May.

 

First Home Loan

The First Home Loan insurance premium has been reduced from 1.0% of the total loan to 0.5%. So a first-home buyer with a $600,000 mortgage will now pay $3,000 towards the insurance premium instead of $6,000.

“This reduction in premium will relieve some of the cost of homeownership for first home buyers in a time of rising interest rates,” Dr Woods said.

At the same time, the government's contribution has also been cut, from 1.2% to 0.7%, which means the total premium amount has fallen from 2.2% (i.e. 1.0% + 1.2%) of the borrower's total loan balance to 1.2% (i.e. 0.5% + 0.7%).

These changes take effect on 1 June.

 

KiwiBuild

Meanwhile, for the KiwiBuild scheme, which supports New Zealanders to buy a new-build property as their first home, minor adjustments have been made to the price caps for three-bedroom homes in some areas.

That includes an increase of $15,000 for three-bedroom homes in the Queenstown Lakes District and $5,000 for Hamilton, Christchurch and places outside the main urban areas.

“Keeping KiwiBuild house price caps aligned with current market values will ensure the scheme remains commercially attractive to developers to ensure the ongoing delivery of these homes,” Dr Woods said.

These changes took effect on 15 May.

 

I love helping first home buyers

Buying your first home is a rite of passage for most New Zealanders. It’s very exciting – but there are a number of important considerations and steps.

That’s why I’d love to guide you (or your child) through the process. I’ll explain your options simply, let you know if you’re eligible for government assistance and then manage the loan application for you.