Kiwibank has launched a scheme through which family and friends can team up to turn the dream of owning a home into reality.
This allow friends or whanau to buy a home with friends or family:
- Combine savings with friends or family to achieve the deposit goal faster
- The ability to share ongoing property related expenses such as home maintenance, rates and insurance.
- Together you may be able to borrow the amount that’s needed to buy the property you’re all after
How it works
- Who can Co-own? – Teaming up looks different for everyone. For example, you could borrow together with a group of friends, with siblings, or be a couple teaming up with another couple. Everyone needs to be on the same page.
- How does the home loan work? – It’s common in Co-own arrangements to have a joint home loan structure where all co-owners are borrowers. For joint home loans, you’re still each individually and together liable for the entire home loan.
- A property sharing agreement – We strongly recommend all co-owners have a property sharing agreement in place before the property is purchased.
- The deposit – If at least one of the co-owners will be living in the property, then generally a combined deposit of 20% of the purchase price is required. This can be made up of savings or borrowing against available equity in an existing property if the home loan is with Kiwibank.
The steps include:
- Choose your co-owners
- Understand what’s affordable
- Engage professionals such as a solicitor, accountant, tax advisor
- Apply for conditional approval
- Set up a property sharing agreement
- Make an offer
There are many things to consider, which you can discuss with your financial advisor. This includes an exit strategy for when the time comes to sell up. Kiwibank also have information on their website.
Stuff published an article about three Wellington flatmates who bought a house together in response to the “ridiculous” rent they were paying. “Collectively, we had a 20 per cent deposit, and we contributed equal parts to it. We split the mortgage repayments equally three ways too, and our repayments are the same as we were paying in rent so it works out well.”
You can read the Stuff article here.