I’ll cut straight to it — if you’re not in Kiwisaver yet (or an equivalent scheme), somethings wrong with you.

Although thousands of people have signed up there is still a group of people who seem paranoid about getting into it. In terms of simplicity it’s a good scheme. That a heap of people who probably weren’t doing anything about their retirement have been spurred into action also makes it a good scheme. As an employee, for every dollar you put in someone else adds another dollar fifty (roughly). And you get $1000 for signing up. What’s not to like?

But the really fantastic part of the scheme in our opinion is the first home buyer subsidy. It’s a massive benefit to anyone who aspires to property ownership. Is that you?

It works like this:

If you have never owned a home*, you can withdraw some of your Kiwisaver funds to help pay the deposit so long as you have contributed to the scheme for at least 3 years. You get $1000 for every year you contribute starting at $3000 up to a maximum of $5000.

You can also take out your own contributions, your employer’s contributions and the interest earned on the lot and put it toward your first home. You can’t touch the government contributions though and there are house price and income thresholds to consider too.

How about some numbers to see how much you’re looking at?

Let’s say you earn $50,000 before tax per year and contribute 2% towards Kiwisaver.

Your annual contributions will be about $1000. Your employer matches this, so add another $1000.

If you’ve been contributing for the minimum three year period that’s $6000 of your own money available for a house deposit. Now add the subsidy of $3000 which gives a total of $9000 for your deposit. Not bad, but here’s the really cool bit.

Most people buy a house with their spouse or partner. If that person has also been in Kiwisaver for three years you can ‘double up’. And if their numbers are just like yours (above) you’ve got a deposit of $18,000!!!

Home ownership might be a whole lot closer than you first thought. Find out if you’re eligible for a first home subsidy and how much you can get by going here. Then call us to arrange for your mortgage pre-approval on 0508 462 489.

*In fact, it may be possible to access the subsidy even if you have owned a home before.

 

About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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