Isn’t it a good idea that the Reserve Bank is making sounds about requiring higher deposits for bank loans? At the risk of sounding like an old codger, back in the day when I bought my first home you needed at least 20 per cent deposit (some of which could be a government Home Start Loan that you had saved a portion of) and no more than a 1/3 of your income in debt servicing. Are we now allergic to saving money and has it just become the norm to buy everything on tick including houses?
Some sensible comments from REINZ chief Helen O’Sullivan:
Encouraging people to have a decent deposit when buying a property was a good thing, and that a loan-to-value ratio limit might help prevent future house price bubbles.
The reality for all first-home buyers is that it’s always difficult to get the deposit. But the less equity you have, the more at risk you are to variations in your personal circumstances.
One can either afford to buy a home or not and saving a decent deposit is the biggest step toward to affordability! And let’s not forget about the lessons learned from the US subprime mortgage crisis…
Get started now, it is never too late.