NZ: Kiwibank to offer KiwiBuild mortgages of up to 90% of value

Kiwibank has announced that it will offer loans to first home buyers getting into the government’s KiwiBuild programme of as much as 90% of the property value.

The programme, a $2 billion commitment is aimed at ramping up homebuilding to deal with excess demand in the housing sector.

The move by Kiwibank aims to win over borrowers who are interested in the programme but are unable to raise high enough deposits to meet the criteria of competing banks.

These borrowers will however still need to raise the remaining 10%. According to RFi Group data, recent first home buyers have raised their deposits through a combination of their savings (52%), Kiwisaver (45%), partner contributions (36%), first home deposit subsidies (21%) and family contributions (18%).

The move from Kiwibank will alleviate the pressure these borrowers face in raising a deposit to enter the market.

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