How to maximise your borrowing on your first home loan

The first thing that comes up when you start planning to buy a house is to determine your budget. Once you have a budget in mind, the next step would be to work out the amount you would like to borrow for your first home. The amount you are able to borrow depends on several factors related to your borrowing capacity. When buying a home or a property, your borrowing capacity will affect the amount you could spend to purchase the property. These factors will improve your home loan eligibility significantly. Some of the factors which can help you maximise borrowing on your first loan are listed below.

Improve your credit score 

The simplest method to improve your credit score is to be regular with your credit card and loan payments. The interest rate offer you get on a loan depends on your credit score. Raising your credit rating insures a better interest rate, which means you will be able to borrow a higher loan amount. Good credit scores assure the lender that you will make the payments on time and can be trusted with a higher loan amount.

The easiest way to improve your credit score before applying for a home loan is by paying your bills and credit card payments on time and limiting excessive or new lines of credit. Holding too many credit enquiries on your report could lower your credit score.

Arrange a bigger deposit

The amount borrowed by a lender may depend on the deposit you make in relation to the value of the property, this is known as the loan-to-value ratio (LVR). Putting down a larger deposit amount (say around 20%) will save you from paying PMI (private mortgage insurance) and saves you a lot of money over a period of time. Bigger deposits could also reflect that the borrower can save money and make the repayments on time.

Lower your debts

It is a good idea to lower your outstanding debts or pay them off completely before applying for a home loan. If your debts are cleared or at least lowered, you could have a better chance of getting a higher loan amount from the lender.

Opt for a longer tenure loan

The normal period of a home loan extends for 25-30 years. If you opt for a longer tenure for your loan, say around 40 years, it will lower your repayment amount. Although increasing loan-term makes your repayments low, the total interest to be paid towards the loan will get higher.

Reduce unnecessary living expenses

Another method of saving money is to cut unnecessary everyday expenses. The more you spend, the lower the loan amount you would get. It is advisable to reduce spending on things that are not needed and commit that amount to your savings. Creating a budget helps here  as you could clearly track where your money is flowing, which allows you to make changes towards maximising your savings.

Organise financial records

It is essential to keep your financial paperwork up to date, especially if you are self-employed. Lenders usually check the records of your account and tax payments for at least the past 2 years. It is best to organise your financial statements before you visit a lender to apply for the mortgage.

Source additional income

Your home loan amount can be increased if you have another source of income, like earning an extra income in addition to your main job. It could be anything from getting rental income, tax refunds, side-hustle or income from doing multiple jobs.

Take joint loans

Choosing to take joint loans with your partner can help you to maximise your loan amount. A lender will consider the incomes of your partner and you, which helps in getting a higher loan amount.

Getting help from family

Using a guarantor like your parents or a family member or you can take help from the family offset mortgage. The lender will assess your guarantor’s financials and may offer you a higher loan amount. It is important to remember that in the case you are not able to make the payments, your guarantor will be liable to pay off the loan.

Use a broker

The expert mortgage brokers at Accord home loans can guide you through the loan process. Our team will help you to choose from various offers to match your requirements.

Purpose of a mortgage check-up

As life situations change so will the financial condition. Having a mortgage check-up done is a great way to ensure that your home loan still aligns with your goals. Mortgage review should be done regularly to check where you stand with your finances.

As the economic and financial trends change, you may observe a shift in your income which creates a crucial need to make some adjustments in your finances. That’s one of the reasons you need regular monitoring of your mortgage.

Our financial advisors will help you through the process of mortgage check-up. Let us look at some of the things that we could review.

Assess interest rates
The interest rates on home loans fluctuate and can differ from what you are paying currently. You could be eligible for a lower interest rate. A mortgage check-up will give you the right knowledge of the current interest rates. It unfolds an opportunity of moving to a loan structure with a better interest rate when the current loan comes up for renewal. A change into a new interest rate plan could save you thousands of dollars over the period of time.

Revise your loan offer

It will be worthwhile to refinance and choose a different loan offer that meets your current requirement. As per your financial situation, you could opt for a home loan plan with a shorter-term and pay off the mortgage earlier or refinance at a lower rate which will lower your monthly payments. Either way, you would be able to save more, giving you freedom to contribute towards other expenses or investments.

Consolidate debts

If you are paying high interest on different debts, consolidating them and getting a new loan to pay off the debts is a smart move. Debt consolidation should be considered to manage multiple loans into one easy repayment to save both money and time.

Improve cash flow

A mortgage check-up gives you the option to refinance your loan. Getting a new loan with either a low-interest rate or a longer term based on your specific needs will help you manage your finances and ongoing expenses. By making these changes you can save money regularly. Refinancing if done right, could help you maximise the tax refunds and improve your cash flow.

Benefit from home equity

Regular financial check gives you the chance to review your current and future money related goals. Based on your financial goals, you can leverage your home equity and then put the benefits to use for home improvements, making other investments or using it for your child’s education, etc. When you have the right loan plan, you feel financially secured and enjoy peace of mind.

Getting a mortgage check-up will help you to make right decisions. Our experts at Accord home loans can guide you through the process, review your situation, advise you on how to make better financial choices. It’s a great way to know your options and then choose the option that matches your needs. Schedule your mortgage check-up with Accord home loans and make the most from our services and your money.

A quick checklist entailing the benefits of getting a mortgage check-up

  • Get better loan terms or end mortgage insurance
  • Merge high-interest loans
  • Improve monthly cash flow
  • Use the growing home equity as leverage
  • Benefit from the tax refunds
  • Achieve contentment from your financial well-being

The flow on effect of Housing Policy for first home buyers and investors

It has been three weeks since the Labour Government’s controversial Housing Policy announcement and the debate continues unabated on its merits and demerits. It has drawn mixed reactions from all sides; the first home buyers who are currently renting and the investors.

What is the nitty gritty of these housing measures announced on the 23rd of March?

For investors –

  • The Brightline test has doubled from 5 to 10 years – if a property is sold within 10 years, any capital gain will be subject to tax. New homes may be exempt, but this is yet to be clarified.
  • A landlord cannot claim the interest cost as an expense of owning a rental property – this will be phased in over the next 4 years. Previously interest was a deductible expense.

For first home buyers who are eligible for the First Home Loan and Grant–

  • There has been an increase in house price caps in Auckland, Wellington, Nelson/Tasman, Napier/Hastings, Waikato, and Dunedin; with new builds seeing the highest increase. This will help these areas where access to a First Home Grant had become increasingly out of reach.
  • There has also been an increase in the income caps for both single first home buyers (to $95,000 p.a.) and more than 2 people ($150,000 p.a.).

I have been swamped with calls from my anxious clients who are investors and also from first home buyers eager to discuss how the policy changes will affect them.

First Home Buyers

The increased income caps and higher house price caps will certainly help more first home buyers to access the First Home Loan and Grant.

The first home buyer’s reaction has however been mixed with some from regional centres being happy, and others from big cities wanting to have the house price caps match the realistic price tags in their cities.

The first home buyers have been asking me how their plans to save for the home deposit will be affected by rent increases, due to removal of interest deductibility. Though a possibility, any rent increases will most likely mirror the gradual phasing out of the interest deductibility over next 4 years.

For others they see this as a possible opportunity to buy sooner as it is likely there will be fewer investors competing in the housing market. Though how long the investors will stay away from the markets will depend on the government working out the details on allowing interest deductibility and the application of bright line test for newly built houses.

My advice to the first home buyers has been to stick to their current saving plan for deposit and seek advice if there is any material change to their financial position.


The Investors

The investors’ immediate reaction has been of anger, confusion, and despair. They never expected the government would remove interest deductibility, as this is a legitimate expense which all other businesses are allowed to claim.

For many “Mum and Dad” investors, owning a residential investment property has been an important part of their retirement plan.  The removal of interest deductibility will have a serious impact on their bottom line for many, as this will delay their ability to become cashflow positive, and they may have been relying on this income to part fund their retirement.   This may lead to more investors needing to sell their investment property at retirement to realise any capital growth rather than holding for the long-term income.

Some of my investor clients have expressed that they will now look to sell their property as they do not have the extra cashflow to meet the higher tax expense while others are looking to increase the rent to match their extra tax costs.

The situation is unique to each investor and after working through their individual financial plans, the conclusion has been that there is no need for any immediate drastic action. Over the next few years my clients’ financial plans will need to be reviewed and adjusted along the way to ensure they remain on course to achieve their financial objectives and goals.


The Impact

The noted economist Tony Alexander has just released his survey of Real Estate Agents to gauge the effects of the housing policy announced two weeks ago. According to Real Estate Agents, fewer people have been attending auctions and open homes and there has been a drop in the number of investors looking to buy. The number of first home buyers has also dropped since February 2021.

However firm bidding at auctions over the past three weeks indicates that the prices are still holding up which could be due to the first home buyer’s sentiment of FOMO (fear of missing out).

It helps to have your financial plans reviewed periodically by your Financial Adviser, especially when there are significant policy changes. Now is a great time to consult your financial adviser to assess how the policy changes will impact you and what action you need to take (if any!) to stay on course with your financial plans. I am more than happy to discuss these matters with you and provide advice as to how you might best navigate these latest changes.

Rajendra Bulchandani, Mortgage Specialist

Refix or Refinance your Mortgage – What should I do?

Your fixed term loan is coming to an end and you are thinking should I refix for similar term or look for a refinance option to get a better deal. 

Guess what, you are not alone. 

Most home owners are faced with this question at the end of their fixed term. You have the option of refixing with your existing lender or refinancing.

Refixing is continuation of your existing loan by negotiating a new fixed rate term with your existing Bank. By default, loan moves to variable rate on expiry of your current fixed term. This is the time you could negotiate for better rates with your existing lender and possibly seek incentives for continued loyalty to the bank.

Refinance or refinancing your home loan means pay off your existing loan and start fresh again with another bank which offer better terms. You would consider refinance if the current bank does not offer favourable rates and cash incentives available in the market.

Once you have taken a home loan, it is important to keep yourself attuned with any changes in the interest rates and availability of options which give new and better terms than your current loan.

At Accord Home Loans, we will provide you with the opportunities that meet your needs, give you the options to choose between various banks and lenders and also negotiate the best offer for you.

Let us look at some reasons to revise your current home loan and move on to refix/refinance.

Change in your income

There can be times when your financial situation changes like getting a promotion at a job, getting a surprise bonus, or getting an inheritance which generates more income opportunities for you. Restructuring which may involve breaking your current fixed term on your mortgage at this time turns beneficial as with the new home loan plan, you can increase your monthly payments, hence reducing the loan term and also saving a notable amount on the interest charges. 

Change in your lifestyle or circumstances

When an unexpected expense occurs, it creates an impact on your finances. Getting a pay cut, wedding, planning to start a family, etc. may create a strain on your income.  This could create cash flow shortfalls leading to loan payment defaults. Reviewing the expenses and restructuring the mortgage at this point can be helpful. You could opt for a longer loan term which will reduce repayments and possibly a better interest rate. 

Thinking of consolidating personal loans on home loan

Managing multiple loans and debts and making all the different payments on time can be a daunting task. Each of these different loans (like personal loans,  credit card, car loans, etc) will have a possibly higher interest rates. You can opt to consolidate all these loans and select a loan structure that can pay off these debts. 

Thinking of redevelopment and / or home makeover

A home makeover calls for additional finances. Whether it is an extension of your house or a makeover, you may want to borrow additional funds for the development.

Savings could be achieved with aligning repayments with cash flows

Did you know that aligning the payments with your salary can help in paying the loan faster. Some people get paid weekly but they prefer to pay their loan payments monthly.  Banks calculate interest on the balance on daily basis so if you are able to make the repayments aligned to your salary, you will be able to see the savings instantly.

At Accord home loans, we will evaluate your current scenario and find the best possible option to ensure you repay your loan faster without compromising your life style.

We will crunch your numbers and work out all scenarios to see if refix or refinance may work in your favour. Give us a call today or book an appointment.

First-home buyers entering property market despite soaring house prices

First-home buyers entering property market despite soaring house prices

First-home buyers have been determined to enter the property market despite sky-high house prices – making up an increasing part of the Southern real estate market, according to CoreLogic.

CoreLogic’s data for the last quarter of 2020 reveals that first-home buyers made up 27% of all Dunedin buyers compared to only 24% for the same period in 2019. The number of first-home buyers in Invercargill increased from 26% to 28%, while the rates were steady in Queenstown (17%) and Central Otago (9%).

In Dunedin median prices increased by 1.9% to $582,000, Invercargill 2.5% to $379,000, Central Otago 1% to $592,000, and Queenstown 1.3% to $1.21 million.

CoreLogic head of research Nick Goodall said first-home buyers had changed their expectations about what and where they could buy, used their KiwiSaver funds, and taken advantage of low-interest rates to enter the market. However, doing this might not work in the future.

“At the current rates of growth, entering the property market will certainly become more difficult throughout the year,” Goodall said, as reported by Otago Daily Times.

Nidd Realty owner Joe Nidd added that places in Dunedin previously known as state housing areas and seen as undesirable were now fiercely contested by first-home buyers. Investors had also become active again, increasing demand further.

Well-built houses on good-sized sections with good views and sun are also in demand, regardless of areas’ previous perceptions.

Report reveals growing investment appetite for build to rent

Report reveals growing investment appetite for build to rent

The housing crisis has resulted in a significant increase in investment appetite for build to rent (BTR) developments in New Zealand, according to commercial real estate firm JLL.

BTR involves the development of multi-unit residential buildings for long-term rentals rather than sales to individual owners.

According to JLL’s latest report, 2020 highlighted the significance of BTR in addressing the housing crisis as the future apartment pipeline in major cities is under pressure in the short and medium term.

JLL senior director Paul Winstanley said BTR could help address the housing crisis by contributing to the construction of a wider range of high-density housing.

“While BTR isn’t the only solution to any housing crisis, it has proven globally to be a key piece of the puzzle to delivering quality homes with a clear community focus in urban areas for those who are not ready, or able, to buy for the foreseeable future,” Winstanley said, as reported by Stuff.

JLL said BTR is set for a breakthrough this year as global investor demand for high-quality BTR developments continues to grow.

“We are working with a number of larger-scale developer/investors who are looking to bring BTR at scale to New Zealand. We firmly expect one or two of them to break ground in New Zealand in the next 12 to 18 months,” Winstanley said.

However, Winstanley said the viability of BTR is still tricky, so government support is needed.

“To that end, it is crucial there is widespread collaboration as well as commitment and a clear line of communication with [the] government to influence policy and re-frame the housing debate to include BTR as part of a solution to the housing crisis,” he continued.

Housing stock hits record low

Housing stock hits record low

First-home buyers and investors might struggle to climb the property ladder this year as housing stock hit record low across New Zealand in December despite a year-on-year 19.2% increase in new listings, according to

The latest data released by revealed 6,592 new listings in December 2020, with 1,064 more properties coming on to the market last month than in December, 2019. However, housing stock was still down year-on-year in almost every region in New Zealand, with 16 of 19 regions dropping to all-time lows since records began 13 years ago.

“Although it’s promising to see pockets of new listings coming on to the market across the country, it was largely our major centres that did the heavy lifting last month,” said Vanessa Taylor, a spokesperson for

“We’re still seeing a lot of competition in the market, and I expect this will continue to drive strong prices in the first quarter of 2021, encouraged by low mortgage rates and a lack of international travel.”

Only 12,932 homes were available for purchase at the end of December, which was a 13-year record low and 29.1% less than the same time last year, according to

Only Auckland, Gisborne, and Central Otago/Lakes avoided hitting 13-year record stock lows last month. Meanwhile, Wairarapa, Coromandel, and Nelson & Bays had the lowest stock compared to 2019, decreasing by 58.5%, 50.3%, and 49.2%, respectively.

“The stock shortage will likely continue to prove challenging for buyers at the beginning of 2021. This is a long-term factor impacting the New Zealand market, and the number of Kiwis returning from overseas, combined with low mortgage rates and lack of international travel, is only adding to the demand for property,” Taylor said.