ASB drops minimum deposit to 5pc for KiwiBuild applicants

Those thinking of owning their own home through KiwiBuild may only need a 5 per cent deposit.

ASB has today announced it will provide pre-approvals of up to 95 per cent of the value of a KiwiBuild home for eligible customers, meaning some participants may potentially only need a 5 per cent deposit.

ASB will also give a $2500 cash contribution to customers who take out an ASB home loan to purchase a KiwiBuild property.

"We're committed to supporting Kiwis into their first home by empowering them to confidently take steps towards realising their dream," ASB acting executive general manager retail banking Claire McKinnon said.

"It's a journey we're excited to be part of by providing tips, tools, guidance and advice, along with offering our market leading KiwiBuild support package."

ASB is the second bank to offer lower KiwiBuild mortgages.

Last month Kiwibank announced it would let customers borrow for KiwiBuild homes with only a 10 per cent deposit.

The move may help first-home buyers struggling to save a 20 per cent deposit to get a property under the scheme, which aims to build 100,000 houses in the next 10 years.

Under Reserve Bank rules, banks can only lend 15 per cent of their total mortgage book to people who don't have a 20 per cent deposit.

But a Kiwibank spokeswoman says that KiwiBuild homes are exempt because they are new builds. In those circumstances, banks can choose to lend to someone with only a 10 per cent deposit.

"Kiwibank is really excited to make the dream of home ownership come true for more New Zealanders," Kiwibank group marketing manager Mark Wilkshire said.

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