How to get more money for your first-home deposit

You’ve been diligently putting money into KiwiSaver for years, but still don’t have enough for a first-home deposit.

We get it, houses are expensive and getting into your first home can seem overwhelming and unachievable.

But if you’re short on money for your first home, there are a few things you can do.

Find ways of earning more

Earning more money is a double bonus to help you save for your first home. Firstly, you earn more, more money will also be going into your KiwiSaver account. Have you asked for a pay rise lately? Changing to a better-paid job can be a great way to get a pay rise.

If this isn’t an option, look at side projects to earn money. Start an online business to earn supplementary income, do some extra work from home, or try selling some of your possessions to raise some extra money. It might not seem like much, but it all adds up.

Cut down on spending

It’s hard to reduce what you spend, we understand that. But most of us fritter away money and sometimes we have no idea where it went. Hands up if you’re guilty! We all overspend from time to time, so don’t worry too much.

But there are ways to focus your mind, really cut down on frivolous spending and save more to reach your first-home goals.

Try keeping track of your bank account transactions for a month. This can give you a good guide to where your money is going. Work out where you can cut costs, and then create a budget.

Maximise your KiwiSaver balance

Can you put more in your KiwiSaver account? You could contribute more of your pay to KiwiSaver. You can get returns on your money, because KiwiSaver is an investment, rather than a savings account. Then, these returns will be added to your balance and they can earn more money, through the concept of ‘compounding’.

Don’t forget the First Home Grant

Did you know you may qualify for free money from the government to help with your first-home deposit? With the KiwiSaver First Home Grant, you may be able to get up to an extra NZ$10,000 per couple for an existing home, or up to NZ$20,000 per couple if you’re building a new home. 

Look for a cheaper house

So, you’ve seen a mortgage broker and been told that you don’t have enough for a first-home deposit. This might be disheartening, but have you considered buying a cheaper house? A smaller one or a house in a different area, where prices are lower? Usually your first home is just a stepping stone to get a foot in the door of the property market. If you make sacrifices and lower your expectations, you might be able to afford a cheaper property. You can get your dream home later.

Speak to an expert

Don’t give up. It’s easy to feel overwhelmed and think your deposit is not enough for a first home. Or maybe you’ve been told by family and friends that you don’t have enough. But have you spoken to an expert? A financial adviser, mortgage broker, or home loan specialist can give sound advice and really help you nut out options. They have tools to help you work out the maximum you can comfortably borrow, and tell you how far away you are from reaching your goals.

Setting goals is an important part of saving for a house – don’t expect to be able to afford your first home tomorrow. You might need a three or five-year plan to get the money in place, and give yourself some options. Talk to an expert who’s experienced with first-home buyers.

Story by Claire Connell, JUNO

Published 15 May 2019

Pie Funds Management Limited is the issuer of the JUNO KiwiSaver Scheme. You can read our Product Disclosure Statement here. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser. All content is correct at time of publication date.