What size mortgage can I afford?
No matter what anyone says, properties are still expensive to buy and, unless you are fortunate enough not to have to borrow to afford one, this is a question most of us will ask ourselves.
There are two answers to the question. Firstly, how much the Bank says you can afford and secondly how much do you feel comfortable borrowing.
Our mortgage calculator will show you what your repayments might be.
The fact is that there is no one-size-fits all in terms of mortgages and we tailor every loan to the individual Client.
For more information you may find the articles Structuring Your Mortgage and What size Mortgage Can I Afford? useful.
What if I am self employed?
Find out more about how we can present your financial accounts in a way that presents your income favourably and work with banks who are happy to loan to self employed people.
Or talk to us about how we can help.
Why use a broker?
As Mortgage Brokers, we can negotiate more favourable terms than you can get directly with the bank. We also know which bank is going to suit your needs better.
Find out more about Edge Mortgages and what we offer.
What is a mortgage broker?
A mortgage broker is a person, or company, that acts independently of the banks and other lenders, working on behalf of people looking for finance (i.e. you). Our goal is to obtain the home loan or finance that is the best solution for your needs. Because we have a background in the banking industry, we are experts in mortgages and finance and know all the pros and cons of different options.
We collect the information that we know these lenders will want from you to make a loan application. We also work out what loan structure suits you and carry out a comparison between the different finance products to get the best deal for you.
You can also read more FAQs about what we can do for you or talk to us.
What is the difference between fixed and floating rates?
Fixed rate loans don’t change during the lifetime of the loan, which are typically between 6 months and five years.
Floating rates that are based on what the bank or lender sets at the time, so will change from time to time as they change their floating rates.
Interest only loans mean your minimum payment only covers the interest on the amount you borrowed. You pay none off the original amount (known as the principal), unless you pay extra toward it. This option can give you a bit of flexibility to decide how much extra you can pay toward your principal depending on your cash flow.
Variable rate loans are ones where the interest rates go up and down. Also known as floating rates, it means if the rate banks are charging people go down, so will your interest rates – and therefore your repayments. But it also means if the rates go up, so do your repayments.
Talk to us, we can advise you on the best structure for your home loan.
Am I eligible for a home loan?
It depends on your income and how much extra you have once you’ve paid all your bills (including any debt you have), that could be put toward repaying a home loan (or mortgage).
How much you can borrow will also depend on your income.
If you are unsure, get in touch for a chat.
What do I have to do to apply for a loan?
All it takes is a phone call – we will complete the application for you!
So just talk to us! We’ll help you through the process – you will need to provide evidence of income such as pay slips, recent bank statements, proof of any debts and how much you still own on them.
Once the loan has been approved, you will need to provide (if you haven’t already) a copy of the sale and purchase agreement for the property, a valuation and you may also need to provide insurance details.
You can only borrow up to a certain amount, depending on your income and your deposit and how much you want to borrow. There is no minimum income to be eligible for a loan, but this will limit how much you can borrow.
But we make the loan application process easy for you and help you along the way. Get in touch to get the ball rolling.
What does pre-approval and conditional approval mean?
This means you go through the application process before you have a particular property in mind or have made an offer on one.
It gives you confidence when looking for and negotiating to buy a home because you already know the maximum you will be able to borrow.
How can I pay my mortgage off sooner?
We can provide you advice on how to structure your loan to achieve your finance goals, including paying off your mortgage sooner than planned.
I can depend on who your lender is, so it’s important to identify your goals when setting up your mortgage and deciding which lender to use. Some charge a fee for early repayment and others don’t.
Who helps me with Property?
The Property Team
Whenever you are undertaking a large project that has the potential for increase – or more importantly a loss – then you need to make sure you surround yourself with a great team. We are here to arrange the funding and help with the financial structuring, but we do this in conjunction with other important members of the Property Team. More details here.
How do I find members of my Property Team?
We have been arranging finance for borrowers for many years and have many we can put you in touch with. We will always look for the best fit for our clients depending on their different needs. It is never a “one size fits all” solution and because we deal with such a large range of lending requirements we have built up a large group of talented professionals we are happy to recommend. We discuss this with clients during the application process but if you would like to talk to us about this separately then please get in touch.
Can I get a home loan if I don’t live in New Zealand?
Yes, although some conditions apply depending on who you get the loan from.
Talk to us if you live outside New Zealand but want to get finance in New Zealand.
What additional costs are there when buying a home?
You should plan for some additional costs when buying a home – and this will include paying for a valuation of the property, lawyers fees, LIM reports from the council and/or a building report.
Some of these expenses are a worthwhile investment because they tell you whether the home you want to buy has any issues associated with it.
See also pre-purchase checks below.
How often should I review my mortgage?
Talk to us if your fixed loan rate is about to expire or there is a big change in your life that will affect how you want to repay your loan.
Don’t let your current lender review and set new terms – we can help you see what other lenders are offering to make sure you can get the best deal while the opportunity is there to do so!
What is a body corporate?
A body corporate is a group made up of owners in a unit title development, like a block of apartments. They look after running the building and any shared spaces.
A unit title is made up of ownership of a specific unit (eg an apartment or flat) plus shared space such as car parks, gardens, driveways etc
Body Corporate are legal entities, and if you own a property held under a unit title, you automatically belong to it. Body Corporate fees are usually an annual fee to cover maintenance, insurance etc.
For more information about Body Corporates, including your responsibilities, see Citizens Advice Bureau.
Firstly, ask the Real Estate Agent if they are aware of any issues with the property
Before buying a property, you should get a LIM report from the council. This Land Information Memorandum report will give you information about the zone of the property, land features and any building or resource consents in the area that may affect you such as roads and major building work.
In addition, it is also a good idea to get an in dependent building inspection done. This will tell you if there are any issues such as leaks, inadequate insulation, structural problems, drainage issues, condition of the roof, etc.
What is the Official Cash Rate?
The Official Cash Rate (OCR), introduced in March 1999, is the interest rate set by the Reserve Bank to meet its inflation target, (currently 1 to 3 percent on average over the medium term), with a focus on keeping future average inflation near the 2 percent target mid-point.
The OCR is reviewed eight times a year by the central bank. Monetary Policy Statements are issued with the OCR on four of those occasions but unscheduled adjustments to the OCR may occur at other times in response to unexpected or sudden developments, but to date this has occurred only once, following the 9/11 attacks in 2001.
Find out more about how the OCR works.
KiwiSaver – How much do I need to put in?
If you are an employee, you can choose to put in 3% (the default rate if you don’t make a choice), 4% or 8% of your Before Tax Pay. The amount of your contributions is deducted from your after-tax pay.
What about my employer’s contributions to Kiwisaver?
In cases where you are employed, over 18 and yet to reach your Retirement Date, your employer will top up your contribution with a contribution at the minimum employer rate, currently 3% of your Before Tax Pay. Employer’s superannuation contribution tax is deducted from employer contributions. People who are self-employed, not employed or under 18 and not employed can choose how much they want to put in and when.
When can I withdraw my savings from Kiwisaver?
There are typically two stages in life where you can make a withdrawal:
1. For your retirement – when you reach the New Zealand superannuation age (currently 65) and have been a member of a KiwiSaver Scheme for at least five years.
2. For your first home – when you make a first home withdrawal after being a member of a KiwiSaver Scheme for three years or more.