Example 1 - Craig and Tracey
How Craig and Tracey bought a house with KiwiSaver.
Craig and Tracey have bought a new home off the plan in the Wellington suburb of Timberlea.
The house will be built in the next 6 months and will cost them $500,000. In the last year Craig earned $85,000 and Tracey, who works part-time, earned $35,000.
They have a $50,000 deposit saved, but this alone is insufficient to secure a loan to buy their home.
Craig joined KiwiSaver in March 2008 and has regularly contributed the minimum percentage of his income to his KiwiSaver account. Tracey has been contributing to KiwiSaver for 3 years.
Generally a mortgage lender would need clients to provide a deposit that totalled 20 percent of the purchase price. In this case, this would be $100,000.
Craig and Tracey have a KiwiSaver HomeStart grant pre-approval for $16,000 and has $34,000 KiwiSaver contributions they can withdraw to help with the purchase of a first home.
|House purchase price||$500,000|
|Minimum deposit required by lender||$100,000 (20%)|
|Deposit components||Saved deposit $50,000|
|KiwiSaver HomeStart grants $16,000|
|KiwiSaver first-home withdrawal $34,000|
|Deposit provided by client||$100,000 (20%)|
|Bank Loan||$400,000 (80% LVR)|