Frequently Asked Questions

There is no single income-to-loan formula that works for everyone.

Lenders consider your income, regular expenses, dependants, existing debts, credit-card limits, student loans, deposit, property type and your ability to manage the proposed repayments.

They also assess your borrowing using their own servicing criteria and may test your ability to make repayments at an interest rate higher than the rate you will actually pay.

Because lenders can assess the same circumstances differently, we can help work through your position and give you a clearer indication of your borrowing capacity.

A 20% deposit is often a strong position to be in, but it is not always essential.

Some lenders may consider owner-occupiers with less than a 20% deposit, subject to their lending criteria and the availability of low-deposit lending. Eligible first-home buyers may also be able to use a Kāinga Ora First Home Loan, where the minimum deposit can be as little as 5%.

A larger deposit can provide more lender options and may also result in better interest-rate pricing or lower low-equity costs.

Talk to us before assuming you need to wait until you have saved 20%.

Possibly.

If you have been a KiwiSaver member for at least three years and meet the eligibility requirements, you may be able to withdraw most of your KiwiSaver savings towards the purchase of your first home. You must generally leave at least $1,000 in your KiwiSaver account. Previous homeowners may also qualify in some circumstances.

Mortgage Time does not provide KiwiSaver investment or fund-selection advice, but we can help you understand how a KiwiSaver first-home withdrawal may fit into your overall home-buying deposit and point you towards the appropriate provider or specialist where required.

Potentially, yes.

Having less than a 20% deposit does not automatically mean you cannot get a home loan. Depending on your circumstances, some lenders may consider low-deposit applications. Eligible first-home buyers may also qualify for a Kāinga Ora First Home Loan with a deposit from 5%.

Low-deposit lending can have additional conditions, costs or restrictions, and lenders still need to be satisfied that you can comfortably service the loan.

The best option depends on your income, deposit, debts, account conduct, property and overall application.

Yes, family assistance is common for first-home buyers.

Depending on the lender and circumstances, assistance might be provided as a genuine gift, a family loan or deed of debt, or through another acceptable family-support arrangement.

The lender will usually want to understand where the money has come from and whether it needs to be repaid. Different structures can have different lending and legal implications, so it is important to get the arrangement documented properly and involve your solicitor where appropriate.

Mortgage Time can help explain the lending options and what supporting documentation may be required.

A pre-approval is an indication from a lender that it is prepared to lend up to an agreed amount, subject to specified conditions.

It can give you much greater confidence about your budget before making an offer on a property.

A pre-approval is not an unconditional promise to lend. The lender may still need to approve the particular property, obtain a valuation, confirm insurance or require updated financial information before the loan becomes unconditional.

Pre-approvals also have expiry dates, so they may need to be renewed or updated if you have not purchased within that period.

The exact requirements depend on your circumstances and the lender, but commonly requested documents include:

• Identification
• Recent payslips or evidence of income
• Bank statements
• Evidence of your deposit and savings
• KiwiSaver withdrawal information, if applicable
• Details of existing debts and credit facilities
• Information about your regular household expenses
• A signed sale and purchase agreement once you have found a property

Self-employed applicants will usually need additional financial information.

We will let you know what is required and help you put the application together before it is submitted.

In the majority of standard residential lending situations, Mortgage Time does not charge you a fee for providing and implementing mortgage advice because we receive commission from the lender when a loan settles.

There are circumstances where a fee may apply, including some non-bank lending situations or where Mortgage Time becomes liable for repayment of lender commission following early repayment or refinancing of a loan.

If any fee may apply to your situation, this will be explained and disclosed to you.

Our Disclosure Statement and Terms of Engagement provide more information about how Mortgage Time is paid and any potential fees.

Your existing bank can only offer you its own lending products and lending criteria.

A mortgage adviser can look at your overall circumstances and consider options from the lenders they are accredited to advise on. Different lenders can take different approaches to income, expenses, deposits, self-employment, property types and other parts of an application.

We can also help structure and present your application, communicate with the lender, explain your options and assist you through to settlement.

The objective is not simply to find an interest rate. It is to find lending and a mortgage structure that is appropriate for your circumstances.

Yes. Being self-employed does not prevent you from obtaining a mortgage.

The main difference is how your income is assessed and verified. Depending on the business and lender, information required might include financial statements, tax returns, IRD information, business bank statements or confirmation from your accountant.

Different lenders can also have different approaches to assessing self-employed income.

We can review the information available, identify what may still be required and help present your income and application clearly to an appropriate lender.

Yes, they can.

Lenders look at your total financial commitments when assessing how much additional debt you can comfortably manage. This can include personal loans, vehicle finance, credit cards, overdrafts, Buy Now Pay Later facilities and student loans.

Even a credit card that is regularly paid off may affect borrowing capacity because some lenders consider the available credit limit rather than just the current balance.

Before applying for a mortgage, it can be worthwhile reviewing facilities you no longer need and discussing whether any debts should be repaid or restructured. Do not close or restructure debt solely for a mortgage application without first considering the wider implications.

Yes, we can review what happened and help you understand the next step.

A decline from one lender does not necessarily mean every lender will reach the same decision, as lending policies and assessment methods differ.

However, it is important to understand why the original application was declined before simply applying somewhere else. The issue might relate to servicing, deposit, credit history, account conduct, employment, the property itself or another aspect of the application.

Sometimes another lender may be appropriate. In other cases, the best option may be to put a plan in place to strengthen your position before applying again.

There is no single mortgage structure that suits everybody.

A fixed loan gives you greater repayment certainty during the fixed period. A floating loan provides more flexibility but the interest rate can move. Offset and revolving credit facilities may help some borrowers reduce the interest they pay by making effective use of savings or surplus cash.

You can also split a mortgage into different portions and use more than one structure.

The right combination depends on your cash flow, savings, plans, risk tolerance and how much flexibility you want. Mortgage structure can be just as important as the headline interest rate.

With principal and interest repayments, each payment contributes towards both the interest charged and reducing the amount you borrowed. Over time, your loan balance reduces.

With an interest-only loan, you generally pay only the interest for an agreed period, so the original loan balance does not reduce through your regular repayments during that period.

Interest-only lending can suit some situations, particularly certain investment or short-term strategies, but it generally means paying more interest over the life of the loan if the debt remains outstanding for longer.

Interest-only lending is subject to lender approval and should be considered as part of your overall financial strategy.

You do not necessarily need to wait until the day your fixed rate expires.

It can be useful to start reviewing your position ahead of the expiry date so you have time to consider current rates, different fixed terms, your mortgage structure and any changes to your circumstances or plans.

The lowest advertised interest rate is not always automatically the right choice. How long you intend to keep the property, whether you expect your income or expenses to change and whether you may repay additional debt can all influence the appropriate fixed term.

Mortgage Time can help review your options before you make a decision.

Refinancing can be worthwhile, but the decision should be based on the overall benefit rather than simply moving for a lower advertised interest rate or a cash contribution.

Things to consider can include:

• Interest rates and lender pricing
• Mortgage structure
• Cash contributions
• Break costs
• Legal costs
• Existing cashback or commission clawbacks
• Loan flexibility and features
• Your future borrowing plans
• Whether the new lender suits your overall circumstances

We can compare the options and help you work out whether refinancing, renegotiating with your existing lender or simply restructuring your current mortgage makes the most sense.

Mortgage Time can assist with much more than first-home lending.

We can help with:

• Buying your next home
• Refinancing
• Refixing and mortgage reviews
• Mortgage restructuring
• Investment-property lending
• Mortgage top-ups
• Renovation lending
• Debt consolidation
• Self-employed lending
• Construction lending
• Business and commercial lending

If your situation is a little different or you are not sure whether we can help, talk to us.

Sometimes the most valuable first step is simply understanding what options are available and what you need to do next.