First home buyers to pay thousands more when deposit rules change

PHOTO: The Reserve Bank is tightening low-deposit lending rules. Photo: Dom Thomas

Those in the market for their first home will need to stump up with tens of thousands of extra dollars when lending is tightened to those with low deposits.

The Reserve Bank is halving the amount of low-deposit lending banks can do, from 20 percent to 10 percent, and banks could act earlier than the October deadline.

CoreLogic has crunched the numbers to see how hard hit first home buyers will be and found that in Auckland it’s an extra $90,000 for a deposit.

Its senior property economist Kelvin Davidson said that’s a lot more money to save.

Kelvin Davidson – CoreLogic NZ | The Property Noise PODCAST

“That’s going to take a bit of saving to get there and that’s on top of what you’ve already got to save so that’s going to put some pressure on.”

CoreLogic’s calculations show first home buyers will need scrounge together an extra $50,000 in Christchurch, up to $81,000 in Wellington and $90,000 in Auckland.