Case study one

Ben and Tony

Ben and Tony

Have a look at how Ben and Toni bought their first home in Christchurch using a Welcome Loan and KiwiSaver.

Ben and Toni have had an offer to buy their first home accepted as long as they meet the conditions set out in the sale and purchase agreement. The property they’re interested in is a $400,000 existing home in Hoon Hay, Christchurch. They have not been able to save a deposit, but have been KiwiSaver members since it started in July 2007.

In the last 12 months, they have earned a combined income of $100,000.

Both Ben and Toni have applications for the KiwiSaver HomeStart grant pre-approved and are eligible for $5,000 each to help with the purchase of their first home. They are also both eligible to withdraw their KiwiSaver contributions (including tax credits). However at least $1,000 must remain in their KiwiSaver account. Together they can withdraw $35,000.

Banks have advised they will need a deposit of between 15% and 20% of the purchase price ($61,500 – $82,000), which they don’t currently have. After looking through the Welcome Home Loan website, they saw it may be possible to get a loan with only a 10% deposit so applied to a Welcome Home Loan lender and was able to show that with all of the KiwiSaver HomeStart grant and first-home withdrawal, they had $45,000 to put towards the purchase. As this worked out to a deposit of 11.25% and because they met the other lending criteria, they were approved for a Welcome Home Loan of $355,000.

House purchase price $400,000
Deposit amount $45,000 ($35,000 + $5,000 + $5,000)
Deposit available 11.25%
Welcome Home Loan $355,000 (88.75% LVR)