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Industry keen for Welcome Home Loan changes

Advisers and lenders believe the government should make it easier for customers to access the Welcome Home Loan and First Home Grant. 

Thursday, November 19th 2020, 2:23PM 2 Comments

Mark McLean

Prime Minister Jacinda Ardern has hinted she may change eligibility criteria for the First Home Loan and First Home Grant, as house price caps continue to exclude most properties in major centres.

People using the schemes can only buy a house worth up to $650,000 in Auckland, despite the median house price recently topping $1 million. 

In Wellington, the scheme can only be used for homes worth up to $550,000. 

As house prices continue to soar amid low interest rates, more homes are being excluded from the schemes. PM Ardern said this week: "Those are a good place for us to look at and say, 'Are there ways that we can enable more first-home buyers to use those products?'"

Lenders and advisers hope changes will be made soon to allow first home buyers to access the 95% LVR First Home Loan, and First Home Grant of up to $10,000. 

Mark McLean at SBS Bank told TMM Online that changes were overdue. He said the bank had recently presented evidence to Kāinga Ora about eligibility restrictions. 

"The price caps are out of sync," McLean said. "There are only certain regions where you can get support. The market has moved even more in the past few months so we hope they will change the caps."

David Windler of The Mortgage Supply Company hopes the changes will be made. 

"Prices have increased to the point where the schemes are largely irrelevant now," he said. "For a first home buyer in Auckland, $600,000 doesn't get you much realistically."

"It's long overdue," Windler added. "When we look at it, either income is too high or the property value is too high for people to use it." 

Tags: first home buyers Lending Mortgage Supply SBS

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Comments from our readers

On 20 November 2020 at 9:59 am Jonny Good Guy said:
Governments are crap
its a simple process just too many meetings and getting everyone opinions slows it all down
Oh yeah check with the banks if they will approve the lending based on the income
Common sense again
On 24 November 2020 at 11:21 am Andy the adviser said:
It's all very well increasing the purchase price caps, but the borrowers still need to be able to service the loans.

Here's an idea - build low-cost homes for first home buyers, and the government can underwrite the any borrowing over the 80% LVR. Banks then face no more risk, and the government, for once, lives up to its promise of more affordable homes!

By the way FHBs - your first home does NOT need 5 bedrooms, walk in wardrobe, en-suite, office, and double garage.

Keep it simple, and you will find life a lot easier.

Builders - There is a huge market for you...

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 ▼6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 ▼6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼6.79 - -
Co-operative Bank - Owner Occ 8.40 ▼6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 ▼7.74 7.29 6.59
SBS Bank Special - ▼7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 ▼6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

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