[rainbow6]

Hi,

In SA banks are willing to loan you no more than 30% of Gross income to finance a house.

What is the percentage banks are willing to loan in New Zealand?

I am trying to determine if I can afford an average house in Aukland (say NZ$440k).
With no deposit and 10% interest rate as an example then the installment is about NZ$4400 per month. After tax on a NZ$60k you will have to use your WHOLE salary for your bond :no
So you will have to have a deposit. So the question above would be posed alternatively: What deposit do I need in order to finance this average house?

Thanks

[Nick88]

What deposit do I need in order to finance this average house?

A very big one. NZ housing was rated 'severely unaffordable' by the 2008 Demographia survey. It is a serious problem, many, young families in particular can no longer afford a mortgage. You can read the whole report here

http://www.demographia.com/dhi.pdf

It is very interesting, and I recommend you read the whole thing (it is quite long).

[rainbow6]

A very interesting article, thank you, but unfortunately does not answer my question.

I would still like to know how much will Banks loan you in New Zealand as a percentage of your monthly Gross income?

[Lupin]

Try NZ bank websites- they all have loan calculators :)

ASB, KiwiBank, Bank of NZ, Westpac etc.

[IanW99]

A very interesting article, thank you, but unfortunately does not answer my question.

I would still like to know how much will Banks loan you in New Zealand as a percentage of your monthly Gross income?

NZ Banks don't tend to work on percentages, they actually work out how much income you have left after all your outgoings and then will lend you this amount. So it might be 10% or 90% all depending on your circumstances.

If you try one of the mortgage calculators as suggested by Lupin then they will help you work out how much they will lend you.

Ian

[incredible hulse]

A very interesting article, thank you, but unfortunately does not answer my question.

I would still like to know how much will Banks loan you in New Zealand as a percentage of your monthly Gross income?
I have heard instances of 100% mortgages. I have also heard instances of mortgages of 4.5 times household salary. We personally were offered upto 4 times my gross salary

[JCM]

A very interesting article, thank you, but unfortunately does not answer my question.

I would still like to know how much will Banks loan you in New Zealand as a percentage of your monthly Gross income?

It depends on personal circumstances but from ENZ...

Getting a mortgage in New Zealand (http://www.emigratenz.org/getting-a-mortgage-in-new-zealand.html)

[chocolate cake]

Hi,

In SA banks are willing to loan you no more than 30% of Gross income to finance a house.

What is the percentage banks are willing to loan in New Zealand?

I am trying to determine if I can afford an average house in Aukland (say NZ$440k).
With no deposit and 10% interest rate as an example then the installment is about NZ$4400 per month. After tax on a NZ$60k you will have to use your WHOLE salary for your bond :no
So you will have to have a deposit. So the question above would be posed alternatively: What deposit do I need in order to finance this average house?

Thanks

I'm not sure what the NZ situation is like, but 30% gross income is a very low % compared to the UK.
UK houses are pretty unaffordable to new buyers as it is, with that limit the market would probably die. 3-4 times gross earnings p.a. is possible\usual in the UK.
That said it's really disposable income after tax that is important, more what you feel you can afford looking at the monthly re-payments and also the potential for interest rates to increase.

[Nick88]

30% gross income is a very low % compared to the UK.

That said it's really disposable income after tax that is important....

I think that's what Rainbow meant, the banks will only lend you the amount that would cost you 30% of your income to make the payments. With the interest rates here that wouldn't be much.

I had heard they lend according to your spare cash, but wasn't sure if this was still the case. It would be a bit of a worry if your circumstances changed, not just unemployment, but something like a pregnancy could be enough to put you in dire straits.

[chocolate cake]

I think that's what Rainbow meant, the banks will only lend you the amount that would cost you 30% of your income to make the payments. With the interest rates here that wouldn't be much.

I had heard they lend according to your spare cash, but wasn't sure if this was still the case. It would be a bit of a worry if your circumstances changed, not just unemployment, but something like a pregnancy could be enough to put you in dire straits.

Thanks Nick, that makes more sense

[rainbow6]

Thanks for all the responses and links. It looks to me like the banks are looking at your overall debt situation (cars included) and then lend accordingly.

[Angelonthemove]

We have a 100% mortgage. We also had a $20,000 car loan here at the time. You do not get as much if you go for 100%. We were offered $500k mortgage on salary join income of $180k per year. (If it was 90% lending we would have got $650k ish) 20 years length of mortgage and my OH is 50.

we still had to come up with a deposit until the final date and the full money is released. We obtained a credit card to do this with low interest payment and told them what we needed it for.

We could not get a bank to give us 100% as we owned another house abroad therefore were not considered first time buyers. Ended up with 2nd tier lender use a broker and they will find a deal for you. Got 8.6% interest 7 months ago fixed for 2 years