Frequently Asked Questions

Your borrowing capacity depends on more than just your income.

Banks typically consider:

• Your income and how it is earned
• Existing debts and credit limits
• Household and living expenses
• Number of dependants
• Your deposit or available equity
• The type of property you are buying
• Your credit history
• The proposed loan term
• The bank's servicing or test interest rate
• Debt-to-income requirements

Two people earning the same income can have quite different borrowing capacities.

We can review your circumstances and give you a clearer indication of what may be achievable before you start seriously looking for property.

A 20% deposit is generally considered the benchmark for an owner-occupied home, but it is not always essential.

Reserve Bank rules currently allow banks to make a portion of their new owner-occupier lending above 80% LVR, meaning some borrowers may be able to purchase with less than a 20% deposit. Individual banks still apply their own lending policies and may charge additional low-equity costs or apply different interest rates.

Your deposit can potentially come from sources including:

• Cash savings
• KiwiSaver
• Sale proceeds from another property
• Equity in an existing property
• A family gift
• In some circumstances, family support or additional security

We can help you work out the most appropriate deposit strategy rather than simply assuming you need 20%.

Potentially, yes.

Banks are permitted to undertake a limited amount of lending to owner-occupiers with deposits of less than 20%. As at October 2026, up to 25% of a bank's new owner-occupier lending can be above 80% LVR.

Approval will depend on the strength of your overall application, including income, affordability, credit history, property type and the amount of your deposit.

Low-deposit lending can also involve additional costs or a higher interest rate, so it is worth understanding the complete picture before making a decision.

If you have been a KiwiSaver member for at least three years, you may be able to withdraw most of your KiwiSaver balance to purchase your first home.

You normally need to:

• Intend to live in the property
• Meet the eligibility requirements
• Leave at least $1,000 in your KiwiSaver account

The withdrawal can include your contributions, employer contributions and eligible government contributions.

If you have owned a home previously, you may still qualify in some circumstances if Kāinga Ora determines that you are in a similar financial position to a first-home buyer.

In many cases, yes.

A pre-approval can give you a better understanding of:

• How much you may be able to borrow
• The price range you can realistically consider
• Any conditions the bank may require
• Whether there are issues that should be addressed before making an offer

However, a pre-approval is not an unconditional promise to lend. The bank will normally still need to approve the property you eventually choose and may require information such as a valuation, sale and purchase agreement or building-related reports.

This varies between lenders, but a pre-approval is normally valid for a limited period.

If you have not purchased within that time, the bank may ask for updated payslips, bank statements or other financial information before extending or renewing the approval.

Your borrowing capacity can also change if interest rates, bank lending policies or your personal circumstances change.

LVR stands for Loan-to-Value Ratio.

It compares the amount you are borrowing with the value of the property.

For example, if you purchase a property for $800,000 and borrow $640,000:

$640,000 ÷ $800,000 = 80% LVR

That means you have contributed a 20% deposit.

LVR rules influence how much low-deposit lending banks can undertake, although each lender still makes its own credit decision.

DTI means Debt-to-Income Ratio.

It compares your total debt with your gross annual income.

For example, if your household earns $150,000 before tax and your total debt after purchasing is $750,000, your DTI is:

$750,000 ÷ $150,000 = 5

Reserve Bank DTI restrictions have applied to residential mortgage lending since July 2024. They operate alongside LVR requirements and limit the proportion of high-DTI lending banks can undertake.

Importantly, DTI is only one part of a bank's assessment. You must still demonstrate that you can afford the repayments under the lender's servicing criteria.

Every bank has its own lending criteria.

There can be differences in how lenders treat:

• Bonuses and overtime
• Commission income
• Self-employed income
• Rental income
• Boarder or flatmate income
• Credit cards
• Existing mortgages
• Childcare costs
• Business income
• Investment properties
• Proposed retirement age
• Different types of property

This means one bank declining an application does not necessarily mean every bank will reach the same conclusion.

Part of our role is understanding your circumstances and identifying which lenders may be the best fit.

The exact requirements vary, but you may be asked for:

• Proof of identity
• Payslips
• Bank statements
• Evidence of your deposit
• KiwiSaver evidence
• Existing loan statements
• Details of credit cards and other debts
• Confirmation of living expenses
• Sale and purchase agreement

Self-employed applicants may also need financial statements, tax returns, GST information or confirmation from their accountant.

Providing complete information early can make the application process considerably smoother.

Absolutely.

The process can simply require more evidence of your income.

Depending on the lender and your circumstances, banks may want to see:

• Financial statements
• Income tax returns
• GST returns
• Current management accounts
• Business bank statements
• Accountant confirmation
• Forecasts or other supporting information

The lender will usually want to understand whether the income being relied upon is sustainable.

Good presentation of a self-employed application can make a significant difference.

It can.

Banks may assess your credit card based on the available limit, rather than simply what you currently owe.

For example, having a $20,000 credit card limit could reduce borrowing capacity even if the balance is currently zero.

Before applying for a mortgage, it can therefore be worthwhile reviewing credit card and overdraft limits that you no longer need.

It can.

Lenders are interested in your overall financial commitments and spending behaviour. Multiple Buy Now Pay Later facilities or frequent short-term borrowing may need to be explained and could affect the bank's assessment.

Keeping your finances straightforward before applying for a home loan can help.

No.

A past credit issue does not automatically mean you cannot obtain a mortgage.

The lender will normally want to understand:

• What happened
• How long ago it occurred
• The amount involved
• Whether it has been repaid
• Whether it was an isolated event or part of an ongoing pattern
• Who you owed money to

Different lenders have different levels of tolerance for previous credit issues.

It is generally better to disclose any concerns early so they can be properly assessed.

There is no single fixed term that is right for everybody.

Your decision should take into account:

• Current fixed rates
• Your expectations for future rates
• How long you intend to own the property
• Your ability to absorb higher repayments
• Whether you expect to make lump-sum repayments
• Your need for certainty
• Your wider financial plans

Rather than simply selecting the lowest advertised rate, we believe your mortgage structure should reflect what you are trying to achieve over the next few years.

For some borrowers, splitting a mortgage can be useful.

For example, rather than fixing the entire loan for two years, you might have different portions expiring at different times.

This can reduce the risk of your entire mortgage needing to be refixed during a period when rates happen to be high.

There are advantages and disadvantages, so the right structure depends on your circumstances.

If you do nothing, your mortgage will generally move onto the lender's floating or variable rate.

That rate may be considerably different from your existing fixed rate.

We recommend reviewing your options before your fixed term expires rather than simply accepting the first rate displayed in your banking app.

There may also be an opportunity to review the structure of your lending, repayment amounts and wider financial plans.

Sometimes.

The advertised rate is not necessarily the only rate available.

Depending on the lender, loan size, equity position and market conditions, there may be opportunities to request a pricing discount or negotiate other incentives.

Interest rate is important, but it is only one part of choosing the right lending solution.

Usually, although the rules depend on your loan structure and lender.

Floating loans generally provide more flexibility for additional repayments.

Fixed loans may allow a certain amount of additional repayment without penalty, but larger payments could result in an early repayment cost.

If reducing your mortgage faster is important to you, we can help structure your lending with that objective in mind.

A revolving credit mortgage operates more like a large overdraft.

Your income can be paid into the account, and every dollar sitting in the account temporarily reduces the loan balance on which interest is calculated.

It can be very effective for borrowers who manage money well and regularly have surplus cash.

However, it requires discipline because the available credit can also be spent again.

An offset mortgage allows money held in linked savings or transaction accounts to offset some or all of your mortgage balance when calculating interest.

For example, if you owe $300,000 and have $50,000 in eligible linked accounts, you may only pay interest on $250,000.

Not every lender offers offset loans, and the details vary between banks.

Yes.

Refinancing can be considered for reasons including:

• A better interest rate
• A cash contribution
• Restructuring your debt
• Consolidating other lending
• Accessing equity
• Renovations
• Buying another property
• Poor service from your existing lender

Changing banks is not always worthwhile, however.

You should also consider any break costs, legal costs, valuation costs and potentially the repayment of previous cash incentives.

We can help you compare the overall benefit rather than focusing solely on the headline interest rate.

Banks sometimes offer a cash contribution when you take out or refinance a mortgage.

The amount offered can depend on your loan size, equity position and the bank's current campaign.

Cash contributions usually come with conditions. In particular, you may be required to repay some or all of the contribution if you refinance or repay the mortgage within an agreed period.

If you repay or restructure a fixed-rate loan before the fixed term expires, the bank may charge an early repayment or break cost.

Whether there is a cost — and how large it is — depends on factors including wholesale interest rate movements and how much time remains on the fixed term.

Before changing a fixed loan, it is sensible to request an indicative break cost and calculate whether the benefits outweigh the cost.

Potentially.

Options may include:

• Topping up your existing mortgage
• Refinancing
• Using available equity
• A construction or progress-payment facility for larger projects

The bank may require quotes, building plans, building consent or a registered valuation depending on the size and nature of the project.

Bridging finance can help when you purchase your next property before your existing home has sold.

For a period, you may have lending secured against both properties.

Banks generally want to understand:

• The value of both properties
• The amount you owe
• Your available equity
• Whether your existing home has sold
• Your ability to service the debt
• Your plan if the existing property takes longer than expected to sell

Bridging finance can be useful, but it needs to be structured carefully because you may temporarily carry substantially more debt.

Potentially.

Equity is the difference between your property's value and the amount you owe against it, but not all of that equity will necessarily be available to borrow against.

Investors are also subject to different LVR requirements from owner-occupiers. As at October 2026, Reserve Bank settings allow up to 10% of new investor lending by banks to be above 70% LVR.

The bank will also assess affordability and DTI requirements.

A 30-year loan term is common, but it is not automatic.

The appropriate term can depend on your age, income, proposed retirement date and your plans for repaying the loan.

A longer term reduces the required regular repayment but normally means paying significantly more interest over the life of the loan.

Where possible, we encourage clients to think beyond simply obtaining the lowest required repayment and consider how the mortgage fits into their longer-term financial goals.

Potentially.

Banks will usually want to understand how the mortgage will be repaid as you approach or enter retirement.

This is commonly referred to as an exit strategy.

Depending on your circumstances, this might include:

• Continuing to work
• Reducing the mortgage before retirement
• Selling an investment property
• Downsizing your home
• Using investments or other assets

The important point is that the strategy needs to be realistic and appropriate for your circumstances.

You can do either.

A bank can advise you about the products and lending policies available through that particular bank.

A mortgage adviser can look at your circumstances more broadly and determine which lenders and structures may suit your situation.

At My Money, we don't believe our job is simply to find an interest rate. We help clients understand their borrowing position, prepare and present their application, navigate bank requirements, structure their lending and make informed decisions throughout the process.

In many standard residential lending situations, an adviser receives commission from the lender when a loan settles.

There can be circumstances where an adviser fee applies, particularly where considerable work is undertaken and a lender does not pay commission, or where agreed work falls outside a standard lending application.

Any potential fees should be clearly explained and agreed before they apply.

Earlier is usually better.

You don't need to wait until you have found a property.

Talking to us early can help identify:

• Your likely borrowing capacity
• An appropriate deposit
• Issues that could affect approval
• How to structure your accounts
• Whether debts or credit limits should be reduced
• What documentation you will need
• Which lenders may suit your circumstances

That can put you in a much stronger position when the right property comes along.