Mortgages in New Zealand

Owning your own home is the great Kiwi dream and home ownership rates in New Zealand remain high. The housing market has been declining recently after a very buoyant run for several years. Whether you are carefully scraping together the deposit on your first home, moving to a larger home, or building your own home, your mortgage will probably be the biggest debt you ever have. 

Mortgage Applications 

When you apply for a mortgage, the lender will look at: 

• The Loan to Value Ratio (LVR) which is how much of the property's value you are borrowing
• Your income
• Your existing debt
• Your residency status
• Your overall financial situation

Repayment Mortgages

Almost all New Zealand mortgages are the repayment type of mortgage, where an increasing percentage of each payment is principal. Typically these are taken out over a 25 or even 30-year term, but a small increase in the regular payment can save you thousands of dollars in interest as well as reducing the time it takes to pay off the mortgage.

Interest Only Mortgages 

Interest only mortgages, where you only pay off the interest on the loan every month rather than the principal, are also available from New Zealand mortgage lenders. The idea is that you can chip away at the principal at your own pace, but this approach does take a lot of discipline.

View more information about mortgages. 

This article was supplied by Broadbase International Ltd (www.broadbaseinternational.com). Information contained in this article is of a general nature and is not intended as a substitute for professional advice based on your individual circumstances. Disclosure statements are available on request and free of charge.