Helping you make sense of it all

A pre-approval is the bank saying you’re likely to be approved for a loan up to a certain amount, based on your current financial position. It gives you confidence when house-hunting, but it’s not tied to a specific property yet. A live deal happens once you’ve found a property and have a signed sale and purchase agreement. At that point the lender reviews the full details of the property and your situation before giving formal approval. Think of pre-approval as your green light to start looking, and the live deal as the final approval once you’ve chosen the house.

LEM stands for Low Equity Margin and LEP stands for Low Equity Premium. These are additional costs that may apply when you're borrowing with a smaller deposit, typically when your deposit is less than 20% of the property value. Lenders see higher loan-to-value lending as greater risk, so they charge either a margin (added to your interest rate) or a premium (a one-off or ongoing fee) to offset that risk. Which one applies depends on the lender. We'll help you understand whether LEM or LEP applies to your situation and factor it into your planning.

When you buy a property, the deposit is usually paid in two stages. The unconditional deposit is paid once all the conditions in your sale and purchase agreement have been satisfied (for example finance, building report or LIM report). At that point the agreement becomes unconditional and the deposit is paid to the vendor’s lawyer or real estate agent’s trust account. The settlement amount is the remaining balance of the purchase price that gets paid on settlement day, usually through your mortgage.

If you’re a first-home buyer, you may be able to withdraw most of your KiwiSaver savings to help with your deposit. Once you’ve signed a sale and purchase agreement, your solicitor will apply to your KiwiSaver provider to release the funds. The money is then transferred to your solicitor and used toward your settlement. Because the process can take time, it’s important to start the application early so everything is ready before settlement day.

Equity is the difference between the value of your property and how much you owe on it. For example, if your home is worth $800,000 and your mortgage is $500,000, you have $300,000 in equity. LVR (Loan-to-Value Ratio) is the percentage of the property value that is borrowed from the bank. If you’re borrowing $640,000 on an $800,000 home, your LVR is 80%. Banks use LVR to assess risk and determine lending conditions, which is why deposit size and property value both matter when applying for a loan.

Most banks prefer a 20% deposit, but it’s not the only option. Some buyers can purchase with 10% or even 5% deposits, depending on their situation and the lender’s criteria. There are also special lending options available for first-home buyers, including Kāinga Ora schemes and low-deposit lending. Because the rules vary between lenders, it’s worth talking through your options before assuming you need the full 20%.

Alongside your deposit, there are a few other costs to factor in when purchasing property. These may include:

• Legal fees

• Building reports

• LIM reports

• Valuations (in some cases)

• Moving costs and insurance

We’ll help you plan for these upfront so there are no surprises along the way.

There’s no single right answer, it depends on your goals and how much flexibility you want. Fixed rates give certainty about repayments for a set period of time. Floating rates offer more flexibility if you want to make extra repayments or restructure your loan. Many people use a combination of both, splitting their loan across different terms. We’ll help you find a structure that suits your plans and risk comfort.

Yes, many homeowners refinance at some point. People usually review their lending when interest rates change, when a fixed rate expires, or when their financial situation evolves. Refinancing can sometimes help reduce interest costs, restructure the loan or release equity. We can review your options when the time is right.

You’re not required to use one, but many people find it helpful. An adviser can compare lenders, structure your loan and guide you through the process from application through to settlement. The service is usually free for clients, as advisers are paid by the lender once the loan is completed.