Welcome Home Loans are for people who only have a small deposit. It is a Government supported initiative to make access to home ownership finance easier for modest income New Zealanders. It is to help people who can afford to repay a home loan but have trouble saving for a larger deposit.

A Welcome Home Loan helps people with modest incomes, who have insufficient deposit to meet the standard 20% requirement, by providing access to a loan with only a 10% deposit requirement.

Housing New Zealand is not the lender but provides lenders mortgage insurance to participating banks, building societies and other lending institutions.

Once borrowers are in their new home, there will be regular contact from the lender to provide on-going advice and support.

If you are interested in a Welcome Home Loan discuss your requirements and your individual circumstances with a participating lender.

Each lender can use slightly different lending criteria. You should talk to participating lenders about your individual circumstances.

To apply for a Welcome Home Loan, you need to choose a participating lender and complete a loan application form. Each participating lender will apply its own credit criteria when making its assessment of your ability to borrow.

The maximum amount you can borrow with a Welcome Home Loan depends on the region you are buying in. Each region has a house price cap. The maximum loan for that region is the house price cap less your 10% deposit.

Some participating lenders allow you to build a new house with Welcome Home Loan. Please ask your preferred lender if they do.

You need to either be a New Zealand citizen or a permanent New Zealand resident (hold a 'Permanent Resident Visa’) to be eligible.

Various credit criteria apply, including employment/income requirements. You should check your situation with your preferred lender to see if you are eligible.

Some property criteria do apply, including a maximum land size of one hectare. When you find a property that suits you, you should discuss this with your preferred lender.

To be eligible for a Welcome Home Loan you must:

  • earn under the income caps
  • be buying a property under the house price caps
  • provide a deposit of at least 10% of the purchase price of the property you wish to purchase
  • be a first home buyer or previous home buyer in a similar financial position to a typical first home buyer
  • be buying the house to live in
  • not currently own a home
  • be a NZ citizen or 'permanent resident' (hold a 'Permanent Resident Visa')
  • be able to afford the repayments of the home loan plus any other debts you may have.
  • have a good credit record
  • meet any other criteria that the lender may apply.

You need a minimum of 10% of the purchase price. The deposit can be gifted by a relative.

Yes! If you are eligible for a HomeStart grant, you can put that towards your deposit. If you are eligible, you can also withdraw all but $1,000 of your KiwiSaver savings to put forward for the purchase of your house.

The financial deposit is the amount that you need to contribute towards the purchase of the property. Most lenders require at least a 20% deposit. With Welcome Home Loan, you need a 10% deposit. A vendor deposit is if the seller of the property requests an amount to secure the property prior to settlement. This normally sits with the real estate agent until settlement date. You cannot use a HomeStart grant to pay a vendor deposit.

Each participating lender will have their own interest rates and fees. One of those fees is to reimburse the lender for the Lenders Mortgage Insurance premium Housing New Zealand charges to insure each Welcome Home Loan. The amount of this fee is 1% of the loan amount. This amount can be added onto the loan.

While an age restriction is not part of the standard eligibility criteria for a Welcome Home Loan, participating lenders will apply their own criteria. In general, most will require applicants to be a minimum of 18 years of age. Contact the participating lender to discuss your personal situation.

No. Welcome Home Loan is a form of ‘Lenders Mortgage Insurance’ which insures lenders against loss if a loan repayment goes into default. ‘Mortgage Insurance’ is a different type of insurance, that protects borrowers in the event that their circumstances changes, and the loan repayment goes into default.

You will also need to meet your preferred lender’s lending, or ‘credit’ criteria.

Not necessarily. Housing New Zealand sets the minimum criteria that participating lenders must met, but lenders are able to apply slightly different credit criteria, provided that they meet Housing New Zealand’s as a minimum.

If your circumstances change after you take out the loan you should speak to your lender about your changed circumstances. They will work with you to help you to continue to re-pay the loan.

The regional house price caps reflect the different house prices in different regions, and allow first home buyers to still be able to take advantage of the scheme in more expensive areas.

As well as meeting the scheme’s eligibility requirements, you will need to meet the lender’s standard lending requirements, which include your credit and account history in addition to your current financial circumstances. So you will need to be able to demonstrate a clear credit history and responsible use of your bank accounts.

First and foremost is the level of your household income, but they will also take into account any current debts that you may have and the limits on any credit cards you may have. As you work towards making a home loan application, it is a good idea to work on reducing or eliminating any debt you may have, and reducing the limits on any credit cards you may hold. Being able to demonstrate a history of savings is always going to help too.