Banks generally are comfortable to lend to 80% of a standard residential property’s value. Banks will look at loans up to 95% however at the time of writing this they can only lend 1 loan above 80% LVR to every 10 under 80% LVR due to current Reserve Bank regulation. So essentially loans over 80% are rationed.
Banks normally like to see genuine savings as the deposit. But it is of course possible to get assistance from family or friends. This may be by gifting or the other party being a guarantor or by a family loan. Kiwisaver is also a vehicle used towards deposit.
This is becoming more common as property values have risen which in turn means that a 20% deposit is a significant sum to save. There are various ways that a family member can assist: gifting money, guaranteeing the loan or by way of a formal loan. There are pros and cons to each approach which your broker or your lawyer can explain.
Once you have been contributing to Kiwisaver for at least three years you become eligible to withdraw funds from your Kiwisaver balance towards your first home. You may also be eligible for a subsidy from the government (via Housing New Zealand).
Along with above criteria Banks will look at construction loans. There are three main types. These can be turnkey, fixed price contract or material and labour basis. We can discuss the differences with you. Banks have relatively strict criteria on these loans.