Returning to New Zealand: a Mortgage Guide

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With New Zealand weathering the COVID-19 storm better than most, many Kiwis are returning home. But once wheels have touched down and you’ve heard your first Haere Mai in years, how do you go about purchasing property?

We break down what you need to know.

How hard is it for a returning Kiwi to get a mortgage?

The short answer is that it’s no harder for a returning Kiwi to get a mortgage than it is for a regular resident. You’ll need all the same things: a solid deposit and proof of the serviceability of the loan you want to take out. A decent credit history won’t hurt either.

However, the problem that lots of returning Kiwis face that the ones already here usually don’t is that ‘serviceability’ part. You need to be able to show that your income can reasonably cover the costs of the loan going forward. For most, that’ll take the form of wages or salary, but other forms of income are also viable.

In other words, as long as you have employment or other income, you can be reasonably sure of being able to secure a mortgage as a returning resident. There are no more or less hurdles for you.

What if you don’t have a job (yet)?

If you can’t prove income, lenders are going to find it hard to accept your application. It’s imperative to line up employment as soon as possible, preferably before you leave for Aotearoa. A signed employment contract is enough, in most cases, as long as it includes:

  • A commencement date
  • Remuneration
  • Any trial period that you may need to pass through first

Lenders can use these as reasonable indicators of loan serviceability. 

The only problems show up with the trial period: it isn’t the end of the world if you need to go through a 90-day trial, but the banks may ask for additional information. Certain professions are more at risk when it comes to these trials, so lenders need to be sure of the likelihood of borrowers not losing their jobs in the first 3 months.

What about offshore income and debts?

If you own a home overseas with a mortgage still on it (a very common situation) and are renting it out, lenders may consider that income as part of your loan serviceability, but they’ll typically ‘scale back’ the rental income in their calculations. They might also request 6 months of statements to get an overview of the spending history.

Again, having offshore debts isn’t a dealbreaker – it just requires a little more information from you.

One last piece of advice

In the time you’ve been away, the lending environment may have changed from what you expect. Interest rates are low, but prices are still booming, and the whole COVID-19 situation has certainly meant that lenders are being cautious with their credit. 

Your best bet if you’re a returning Kiwi looking to take out a mortgage is to get expert advice from a qualified adviser. There are new products, new lenders, new processes, new laws and new expectations you may not be familiar with, so make sure you get across what you need to know.

For more information, check out our dedicated episode on this subject on Beyond the Field, the Money Empire podcast. Welcome home!

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