How to save for your first home deposit

Ever since piggy banks were invented, learning to save is a skill that some seem to be better at than others.

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If you’re more inclined to spend, it’s never too late to learn something new; there’s no better time than when you need to save a deposit for a home.

Work out how much you need

The first step, for practical reasons as much as motivation, is to have a savings goal.

Decide how much you want to spend on a home and what size your deposit needs to be. If you’re a first time home buyer using a Government assistance scheme like KiwiSaver, you may qualify for a 10% deposit. If not, you’ll need at least 20%.

Head along to some open homes so you know exactly what your money can actually buy, and put those personal dreams like a swimming pool, horse paddocks or luxury ensuite to one side for the first year or two.

Seek out the advice of a financial expert at your local bank, lending institution or a mortgage broker – it’s usually free.

Pay off other debt

Now’s the time to pay off any personal loans, hire purchase agreements, credit cards or other debts. Being debt-free will go a long way when you’re applying for your home loan.

Make a budget and stick to it

Facing up to adulthood can be tough sometimes. Budgeting isn’t always fun but it’s realistic. Prepare the best budget you can without having to resort to eating instant noodles for three years – but always keep the end goal in mind.

Seeing a financial expert can help, or go to Westpac’s online budget calculator.

Shop around for a loan

There are many different types of mortgage loans and arrangements, and some lenders offer better interest rates than others.

By shopping around for the best deal, you’ll know what sort of mortgage payments you’ll be making and whether you can afford them. Start by going to Westpac’s online mortgage calculator.

Seek first home buyer assistance

If you aren’t already signed up to KiwiSaver or haven’t investigated other schemes, now’s the time.