We're excited to announce the launch of what could be a game-changer for some first home buyers looking to get onto the property ladder.
It allows deposits of as low as 5%, and is aimed at helping first home buyers who have good incomes but not enough deposit to meet the 20% often demanded by trading banks, or who don’t qualify for the Government’s Kāinga Ora scheme.
Launchpad consists of two loans:
The all-up borrowing rate at 95% LVR could be as low as 4.09% per annum. The loan requires the payment of an establishment fee of $1,000.
Applicants must be New Zealand residents and first home buyers who are planning to live in the property, which must be in a metropolitan area. They need to be employed and paying PAYE income tax, and will be subject to a credit check and calculations to ensure they have enough income to service the mortgage. Deposits must be genuinely saved, can include Kiwisaver, and cannot be gifted.
Apartments need to be a minimum 50sqm and a 10% saved deposit is required for these loans. Most banks require a 20% deposit so this will help more first homebuyers into the apartment market.
Friends or siblings can apply together for loans but there can be no more than two of them and they must both live in the property.
People were coming to us totally frustrated at their inability to buy a home because the market was outstripping their ability to save the required deposit, so we set about designing something that could help as many of them as we could. Being in the unique position of being both a mortgage broker and a peer-to-peer lender, we felt there must be something we could do with a bit of imagination, and Launchpad is it. It’s a stepping stone. The idea is to get people into their first home and on the ladder. That’s the hardest bit and Launchpad will solve that for many people.
It’s not a solution for everything or everyone, but it’s a solution for those with good income and servicing who haven’t saved enough deposit and don’t have the luxury of mum and dad being able to help out. We’re just levelling the playing field and giving more people the opportunity to buy on their own and sooner than if they have to save a larger deposit.
Till now, there have not been any options for people with a household income over $150,000 or wanting to buy over $700,000 unless they had help from parents or at least a 10% deposit, often more. This is an option that fills that gap.
At the same time, we’re giving retail investors the opportunity to invest into residential mortgages and personal loans and get returns between 4.00% - 7.50% per annum1, knowing they are also helping build New Zealand. It’s a win/win and starting to change the way money works in this country.
We are one of New Zealand’s biggest mortgage brokers, with a focus on helping first home buyers. We help people purchase well over $2 billion worth of property each year as a mortgage broker, and are also a lender focused on building out niche lending solutions for homeowners. Our mortgage advisors are supported by our leading proprietary technology, and unique lending and investment platform that delivers innovative real-world solutions for New Zealand homeowners.
1 Interest rates are subject to change and T&C’s apply.