As we enter the new year and get a clearer understanding of the new government low deposit restrictions a number of solutions have become available to those without a 20% deposit. These include:

New Builds. New builds have been excluded from the Government restrictions. To me this seems a great option for people in Christchurch as new builds are similarly priced to existing houses. New builds, however, will be built to the new earthquake standards and of course not have any earthquake related issues or problems. Minimum deposit requirements for new build start at 10%

Funding Surplus. The government restrictions have limited  borrowing  over 80% to less than 10% of a bank’s total lending. So there is some capacity that still exists. This capacity is usually reserved for existing clients. If there is unused surplus it has been made available to new purchases. This capacity is often only available for a short period of time, literally a matter of days in some cases and usually you need to be able to confirm on a specific property, so not applicable for pre-approvals. If you are able to act quickly though as little as 5% could enable you to purchase a property.

Other sources. Gifting, or use of equity. I’ve spoken on this previously and typically we see parents utilising the existing equity in their own home to make up the deposit required for their children’s mortgages. There are different ways to structure this but in the first place you need accommodating family.