Higher-income borrowers will be able to access the KiwiSaver subsidy and Welcome Home Loans under changes announced today by the Government – but they will have to stump up more of a deposit.
By Susan Edmunds
The changes mean the Government will spend an extra $64 million over the next four years on beefing up the schemes.
Housing Minister Nick Smith had previously indicated that the Government was considering changing the thresholds for the schemes. That was confirmed today.
The KiwiSaver subsidy allows buyers to get an extra $5000 towards their first-home deposit.
They have to have been KiwiSaver members for five years to access the full amount and previously a couple could only earn up to $100,000 between them.
The house they were buying could previously only cost up to $400,000 in Auckland, Wellington, Selwyn and Queenstown, and $300,000 in other parts of the country.
The Government plans to increase the income threshold to $120,000 and the Auckland price cap to $485,000.
More significantly, the requirements for the Welcome Home Loan scheme will be adjusted to match.
At the moment, the Auckland house price cap for a Welcome Home Loan is $350,000 and $280,000 for lower-priced areas. Borrowers have previously only been able to have a combined income of $85,000, almost $40,000 a year less than the new threshold.
The Government aims to issue 2500 Welcome Home loans a year, up from the current 850. Smith said the changes would mean 11% more people would be eligible.
But at the moment buyers can access a loan with a very small or no deposit if the house they are buying costs $200,000 or less. They will now be required to have a 10% deposit.