Blog title

Should I use my Kiwisaver to buy my first home?

16 January 2019

Should I use my Kiwisaver to buy my first home?

The idea of owning your own home has been drilled into many of us since we were old enough to understand what it meant to own your own home. We were often told that if you are paying rent, you were paying someone else’s mortgage or that it was money down the drain. With the rapid increase in property prices and the current market still increasing (despite slowing) it has made the dream of being a home owner slip further and further away for many.  The latest update from Trade Me tells us that the average Auckland price is $ 917,150 as of September. After the GFC, 0% lending became a thing of the past and with current deposit requirements being 15-20% or $160k-$180k, saving that amount of money for a deposit is simply unrealistic for most.

Luckily there is an option out there for you

After 3 years of contributing to Kiwisaver, you may be entitled to withdraw your savings providing you leave a minimum of $1000 in your account. This includes all of yours and your employers’ contributions and any return on investment received over that time.

There is also a Kiwisaver HomeStart Grant which you could be eligible for. This is a $10,000 contribution for existing properties or $20,000 for new properties which goes towards your deposit. Follow the link to answer any question you may have around the HomeStart Grant.

What about my Retirement?

You do need to keep in mind that Kiwisaver is designed for your retirement. The more of the investment that you withdraw, the less you will have for your retirement. That being said, it is likely that your property will be repaid by the time you retire and will have increased in value. This will have given you more options to increase your wealth along the way by using the equity created.  This is important to keep in consideration as the current NZ Super weekly amount is $401 for individuals and $617 for couples. This is generous by many other countries Super equivalent, however it will quickly fall short if you are still paying a mortgage as well as daily expenses and wanting to do any extras, like travel which I know I plan on doing lots of once I retire.

At the end of the day there are many factors to consider before you take that big first step onto the property ladder. They don't call it one of " life’s biggest decisions " for no reason.

Contact the team at Panda today to see how we can help you.

Category: Finance Mortgage Broker Broker Kiwisaver

Tags: Mortgage Mortgage Broker Mortgage Adviser Finance Broker Mortgage Advice Home loan interest rate Kiwisaver