Your journey to home ownership

We’ve broken down the home loan application process from start to finish, so you know what you need to do, when you need to do it^.

Step 1: Save a deposit 

Your deposit usually needs to be about 20% of the home you are hoping to buy. So, if you are intending to buy a home that costs $500,000, you’ll need a deposit of $100,000. There are several ways you can get your deposit together – by budgeting and saving hard, withdrawing money from your KiwiSaver fund and grants, or being gifted funds by relatives. 

In some cases you may need less deposit, especially if you are buying a brand new property and it qualifies for an exemption from the RBNZ’s LVR restrictions.

Savings accountsLearn more about saving for a deposit

Step 2: Work out how much you can borrow

The amount you can borrow is based on a number of factors, including the size of your deposit, your income, your expenses and other financial commitments. Find out how much you might be able to borrow using the How much can I borrow? calculator.

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Step 3: Get a conditional approval 

When you’re ready to start looking at properties, you’ll need to apply for conditional approval.  A conditional approval, sometimes referred to as ‘pre-approval’, gives you some confidence about the amount you can borrow, subject to meeting all of the bank’s conditions. All conditional approvals come with conditions you’ll need to meet before the final approval is given to you. 

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Step 4: Buy your property

You’ll most commonly come across properties listed for sale by negotiation (these will sometimes have a specific price attached) and properties for sale by auction. 

Sale by negotiation or listed price

In this type of sale, you may have the opportunity to make a conditional offer. This means you can specify conditions you need to meet before the contract is unconditional. Making an offer subject to finance is always strongly recommended, as is seeking a building inspection and obtaining an up-to-date LIM report. 

Sale by auction

If you are planning to bid at an auction, you’ll be making an unconditional offer. This means you’ll need to have done your due diligence prior to the auction, such as obtaining a builders report and making sure you have a copy of an up-to-date LIM report. If you are planning to bid at auction, you’ll need to provide the bank with a copy of the auction particulars and conditions before the auction date, and advise the maximum amount you are looking to bid. The bank can then advise if it has any further requirements (e.g. a valuation). 

Step 5: Get a final approval

Before you can proceed with the purchase, you need to provide the bank with a copy of the sale and purchase agreement. The bank may need a registered valuation, which they will likely order for you (at your cost) and you’ll also need to make sure you have provided the bank with all the information they need to confirm your loan, such as evidence of income and bank statements.

Step 6: Confirm your loan structure

At this stage, you’ll need to discuss interest rates and loan structure (e.g. whether you want to split your loan between fixed and floating portions) with the bank. Once the structure of the loan is decided, the bank will arrange loan and mortgage documentation to be sent to your solicitor for signing.

You’ll also need to arrange home insurance, so you’re all ready to go when you take ownership. 

More about home insurance

Step 7: Taking ownership of your new home

This is the most exciting part of the process, where all your saving and commitment have finally paid off. When the bank receives the signed documents from your solicitor, the loan can be drawn down on the settlement date (which is when ownership of the house is transferred to you) and when you get the keys to your new home. 

Make sure you double check what your first repayment will be in Internet Banking. Once you’re settled in, you can look at tweaking your repayments to save money and pay off your home loan faster. 

Managing your home loan online