Purchasing a property off the plans can be a great option for prospective buyers. Finance is generally easier to access for these properties and being able to lock your contract in with a 10% deposit upfront, and incur no additional cost until the property is complete and ready to occupy, offers more flexibility around managing your finances.

For investors, with the Loan to Value Ratio (LVR) restrictions announced by the Reserve Bank earlier this year, brand new properties are exempt from these and can be funded with a significantly lower deposit through all major banks at 20% when compared to the 40% required for any existing property. In addition to the deposit differences, the proposed taxation and bright line test changes appear to favour new build properties over existing homes as well, potentially further incentivising this option for the savvy investor.

For first home buyers or purchasers intending to live in the property, new builds can typically be funded with deposits starting from 10% and again due to these properties being exempt from the LVR restrictions typically all lenders in the market will provide funding against these for buyers who might not have a 20% deposit yet. In contrast to this, buyers whose deposits are in that 10 – 20% range will typically be restricted to only obtaining pre-approval through their current bank when looking at any existing properties.  Not being restricted to just your current bank means you can shop around for a competitive offer that best suits your requirements and gives you a better chance at ending up with a great deal for your new mortgage.

Whether you are a seasoned investor or a first home buyer looking to enter the market, having access to expert advice and dealing with a mortgage adviser who can canvas a range of options for you will ensure you end up with a loan strategy and a great mortgage package that is fit for purpose. If you believe I can help you finance your next purchase I would love to hear from you.

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Sam Collins
Mortgage Adviser
021 660 159

sam.collins@loanmarket.co.nz

‍loanmarket.co.nz/sam-collins

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