Team effort
You’ve got the dream, the plan, and the savings – but maybe not quite enough. That’s where family could come in. More first home buyers are teaming up with their family to make it happen.
So how could your family support you onto the property ladder, should they wish to – and what might that look like in real life?
This article walks through common options and shares an example from someone who’s been there.
How family could help
There are a few ways your whānau could give you a leg up, each with its own pros and cons. Here are some of the most common:
Boosting your deposit
They could make a one-off contribution to help you meet deposit requirements. This could be:
- A gift, with no intention of it needing to be repaid
- A Deed of Debt, which is a formal agreement confirming that the money needs to be repaid if the property is sold or if other circumstances arise (as approved in advance by the bank).
Guarantees
If your family has an existing home loan with the same bank, they might be willing to let you use their equity to help secure your own loan. This could reduce the deposit you need or increase how much you can borrow.
It’s worth noting that under a guarantee, a family member agrees to take responsibility for some or your entire loan if you're unable to make repayments for any reason.
There are a number of conditions that both you and whoever is providing the guarantee will need to meet. The family member will undergo an affordability assessment to ensure they can take on this responsibility. Independent legal advice is mandatory before proceeding with a guarantee, and tax advice is strongly recommended.
Co-ownership or shared investment
Another option is to buy a property together. This option involves a bit more coordination as your responsibilities, goals, and finances become intertwined with someone else’s, but it’s another way to make home ownership possible.
Each of these options carries risk, so be sure to get independent legal and tax advice before making any decisions.
Quick guide: gift, loan, guarantee, or co-ownership?
- Gift: Money given by family with no expectation of repayment.
- Loan: Money given by family with an agreement to repay.
- Guarantee: Using a family member’s equity to support your loan.
- Co-ownership: Co-borrowing with a family member or friend, where both owner’s finances are used to support the loan.
A real-life example: how one family made it work
If you have parents who are willing and able to help, that support can sometimes make a big difference. Every family is different, and there’s no one right way to structure it – but hearing how others have approached it can help you understand what’s possible.
Here’s how Ana teamed up with her parents when she was buying her first home.
Ana's story
When Ana and her partner were getting ready to buy, they were close to their deposit goal – but not quite there. Around the same time, her parents wanted to help them get onto the property ladder.
Instead of keeping their savings in the bank, Ana’s parents decided they’d rather support the couple by lending them part of their deposit – at an interest rate that worked for both sides.
To keep things clear and fair, they all went through independent lawyers to set up a formal loan agreement, including repayment terms. Ana also let her ANZ Mobile Mortgage Manager know what was happening and provided the documentation to ensure the repayments could be taken into account as part of her home loan application.
Once everything was signed, Ana set up an automatic payment to repay her parents every fortnight. “After that, we barely had to think about it,” she says.
Looking back, she says the clear agreement made all the difference. “Because everything was formalised upfront, it never felt awkward. Everyone knew exactly where they stood.”
Want to help your kids into their new home?
As a family member, there’s lots to consider before deciding how to help, particularly if you are considering acting as a guarantor.
More helpful content
You could get a $5k cash contribution with your first home
If you’re a first home buyer and taking out a new home loan (minimum of $200,000) you could get a $5,000 cash contribution. The cash contribution is conditional on keeping your home loan with ANZ for at least three years. Lending criteria, terms, conditions and fees apply to this offer—.
Important information
ANZ lending criteria, terms, conditions, and fees apply. Interest rates and fees are subject to change.
This material is for information purposes only. We recommend seeking financial advice about your situation and goals before getting a financial product. To talk to one of our team at ANZ, please call 0800 269 296, or for more information about ANZ’s financial advice service or to view our financial advice provider disclosure statement see anz.co.nz/fapdisclosure.