As retirement gets closer, it’s worth looking at whether your mortgage is set up for what comes next. Paying it off may be the goal, but you may also want money available for unexpected expenses, travel or helping your children into a home.
A new job, a pay rise or a move into self-employment can change more than your working week. It can also affect how a bank assesses your
income and whether your mortgage still fits your budget.
An income change does not automatically put your property plans on hold. The key is understanding what it means before you apply for lending
or commit to your next move. Here are the questions I would work through with you.
You might expect every bank to offer you roughly the same mortgage amount. After all, your income, deposit and expenses don’t change when
you approach a different lender.
But banks can assess the same situation differently. Following my recent
newsletter about whether rent could cover mortgage repayments,
this is another useful question to explore: how much could the choice of lender affect your borrowing options?
The 20% deposit has long been treated as the price of admission to home ownership in New Zealand. On a median-priced house that's well north
of $150,000 in cash.
So, National's announcement this week on 5% deposits got attention. But low-deposit lending isn't new – and one pathway at a major bank
isn't limited to first home buyers at all.
If you’re paying rent while saving for a deposit, you may have wondered how those regular payments compare with owning your own home. Could the amount you currently spend on rent, combined with what you’re saving each week, be enough to cover mortgage repayments?
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When the property market goes quiet, it’s easy to assume buyers should sit tight too. Fewer people at open homes and less urgency around
buying can make waiting feel like the sensible option.
But a quieter market doesn’t automatically mean there’s less opportunity. For buyers who are financially ready, it may offer something
that’s harder to find when competition is strong: more breathing room.
Getting pre-approved for a mortgage can feel like a major milestone. You have supplied your information, the lender has reviewed your
position, and you now have an indication of how much you may be able to borrow.
It is certainly a valuable step. However, pre-approval does not always mean you can confidently make an unconditional offer on any property
within that price range.
There are still a few important pieces that need to fall into place
As widely expected, the Reserve Bank has increased the Official Cash Rate by another 0.25%, taking it from
2.50% to 2.75%.
This is the second consecutive increase following July’s move, with the Reserve Bank continuing to remove
monetary stimulus as it works to bring inflation back towards its 2% target.
Importantly, today’s announcement suggests the job may not be finished yet...........