{"id":534017,"date":"2026-07-19T19:02:09","date_gmt":"2026-07-19T19:02:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/534017\/"},"modified":"2026-07-19T19:02:09","modified_gmt":"2026-07-19T19:02:09","slug":"first-home-buyers-warned-of-costs-when-buying-with-less-than-20-deposit-the-prosperity-project","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/534017\/","title":{"rendered":"First-home buyers warned of costs when buying with less than 20% deposit \u2013 The Prosperity Project"},"content":{"rendered":"

But Loan Market mortgage adviser Michelle Isemonger told Nadine Higgins on The Prosperity Project<\/a> podcast it can come at a significant cost.<\/p>\n

Borrowers with less than 20% equity generally don\u2019t qualify for banks\u2019 discounted \u201cspecial\u201d mortgage rates and they also face a low-equity margin or fee.<\/p>\n

\u201cWhen you do have less than a 20% deposit, it is a bit harder,\u201d she says \u201cWith a 5% deposit … they\u2019re adding in a low-equity margin of up to 1.5%.\u201d<\/p>\n

That additional margin generally remains until the borrower\u2019s equity reaches 20%, either by paying down the mortgage, the property\u2019s value increasing, or both.<\/p>\n

Eligible buyers can access K\u0101inga Ora\u2019s First Home Loan with as little as a 5% deposit, although the scheme has income caps. Those who don\u2019t qualify for that can still access banks\u2019 own low-deposit lending products if they meet the lending criteria and the bank is within the Reserve Bank\u2019s low deposit lending limits. But either way, borrowers face extra costs.<\/p>\n

Despite that premium, Isemonger says many first-home buyers are still deciding it\u2019s worth buying in a softer market. \u201cMost of our clients at the moment are first-time buyers, so everyone is sort of going, \u2018Well … might as well get into it now,\u2019\u201d she says.<\/p>\n

\u201cFirst-time buyers are getting some really good buys.\u201d<\/p>\n

She recently helped clients buy a home for about $1.1 million that the previous owners had purchased for around $1.5m in 2021.<\/p>\n

But she says the decision shouldn\u2019t solely come down to whether the bank is willing to lend you the money.<\/p>\n

\u201cWhat is your lifestyle going to look like when you purchase a property?\u201d she says. \u201cIf someone\u2019s going, \u2018If I can\u2019t go on a holiday every year, I don\u2019t want to purchase a property … I don\u2019t want to borrow that much\u2019 \u2013 that\u2019s completely fine.\u201d<\/p>\n

Watch or listen to the full episode of The Prosperity Project<\/a> for more.<\/p>\n

The Prosperity Project is hosted by Nadine Higgins, an experienced broadcaster and financial adviser.<\/p>\n

Follow the show at iHeartRadio<\/a>, Apple Podcasts<\/a>, Spotify<\/a> or wherever you get your podcasts. New episodes are released every Monday.<\/p>\n","protected":false},"excerpt":{"rendered":"But Loan Market mortgage adviser Michelle Isemonger told Nadine Higgins on The Prosperity Project podcast it can come…\n","protected":false},"author":2,"featured_media":534018,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[2327,138,3237,5098,802,20392,31787,307,36023,8455,2964,33963,7494,5829,130,111,139,69,1118,3263,814,20586,306,131,223,8222,1316,102,2963],"class_list":["post-534017","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-2327","tag-business","tag-buyers","tag-buying","tag-costs","tag-deposit","tag-doing","tag-dont","tag-firsthome","tag-getting","tag-half","tag-ladder","tag-less","tag-many","tag-more","tag-new-zealand","tag-newzealand","tag-nz","tag-of","tag-project","tag-property","tag-prosperity","tag-realise","tag-than","tag-the","tag-warned","tag-when","tag-with","tag-zealands"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/534017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=534017"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/534017\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/534018"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=534017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=534017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=534017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}