Westpac coaches first home buyers

Photo / APN

Westpac Bank has launched a new service offering electronic coaching to people saving for their first home and a $1000 carrot to those who manage to reach at least $10,000.

The bank today launches its HomeSaver scheme which links savings to the specific target of buying a home and says those who sign up will get preferential treatment when it comes to low equity lending.

Around 30,000 Kiwis buy their first home every year but that number could drop by between 6000 and 8000 under new lending restrictions.

The Reserve Bank ruled that from October 1, only 10 per cent of banks' lending could be to customers with a deposit of less than 20 per cent.

Banks who do not meet the new rules face losing their licence.

Ian Blair, Westpac's general manager of retail banking, said HomeSaver was a way of helping first-home buyers who were faced with steep savings' targets to stay on track and reach their goal.

"We understand saving for a first home deposit is a major undertaking, and we want to help our customers reach this goal," he said.

Research by the bank has revealed that it can take on average seven years to save for a house deposit and the average age of a first-home buyer is 34.

Saving $400 a fortnight, it would take seven years to save a deposit of $80,000 - a 20 per cent deposit on the national median house price of $400,000.

That time could be cut to three years if a person or couple saved $960 a fortnight.

Savers who sign up to Westpac's scheme can choose a supportive coach or a disciplinarian and will receive regular email messages.

Blair said those wanting to qualify for the $1000 had to show six months' savings history.

And they have to have at least $10,000 by the time they draw down on a mortgage.

That money could come from parents or family but the bank would not be encouraging people to draw down the money from credit cards.

Meanwhile research from property analytics company PropertyIQ has shown first-home buyers in Auckland are targeting the city's fringes.

Twenty per cent of national sales were to first-home buyers.