Whether you’ve been scouring open homes for a while, or you’re still getting your ducks in a row, the event of COVID-19 has probably put a bit of a spanner in the works for your first-home-buying plans. While we’re going through this unprecedented time, here are some things to consider if you’re a first home buyer.
If you’re looking to buy your first home, the current available interest rates will be looking pretty appealing right now. The recent OCR cut to 0.25% – a record low – has meant that home loan interest rates have dropped tantalisingly low. For example, some banks are currently offering around 2.69% fixed for two years.
If you’ve got your deposit sorted, it’s never been a better time to lock in a great rate on your mortgage. However, with these lowered interest rates, it’s likely that you’ll also be facing extra competition from both professional and mum-and-dad investors to get those great properties.
Your KiwiSaver balance might have been looking a little scary during this time, especially if you were planning to use it to help with your first home. The important thing to remember with KiwiSaver is that it will go and up and down, and the only time you need to worry about the balance is when you come to use it, which could be a little while away yet – maybe enough time for it to grow again.
It’s important to have your KiwiSaver set up with the correct fund type for your circumstances, and you can have a chat to one of our advisers if you’re unsure what your options are.
Think of this time as more of an opportunity in terms of preparation. No matter how far along you are in the preparation process, whether you’ve got your deposit sorted or not, more time is always a good thing to cement what you really want in a first home and to help you get a plan in place.
It’s a good idea to use this time wisely and pay off any outstanding debts if you can, as this will give you a better chance of being approved for a home loan. You might also have some extra cash around that you haven’t been spending on takeaways or on other goods, so use that to help pad out your savings.
If your finances have been affected by COVID-19, you might not be in a position to save for your first home, but there still might be other ways you can make it work – have a chat to our mortgage experts to see what support is available.