Buying your first home has always felt like a massive milestone. - but right now, it really is becoming more achievable. In this episode, we unpack 5 Reasons Buying Your First Home Just Got Easier, from falling interest rates to smarter ways banks assess lending.
With the market shifting towards first-home buyers, these five changes are reshaping what’s possible for anyone trying to get onto the ladder.
1. Interest Rates Have Dropped - Big Time
One of the biggest reasons buying your first home has become easier is how dramatically interest rates have fallen. Not long ago, one-year fixed rates were sitting around 7.5%. Now, they’re sitting below 4.5% – a shift that transforms affordability for first-home buyers.
For a $700,000 purchase, that drop is worth roughly $21,000 less in interest over a short period, and around $485 a month in reduced repayments compared to last year. A 30-year mortgage at 7% costs $1,075 per week… but at 4.49%, that weekly repayment falls to $818.
Lower interest rates also mean lower test rates – the higher interest rate banks use to assess whether you can afford the loan. When test rates come down, approval becomes easier, even if your income hasn’t changed.
Westpac has already confirmed first-home buyer lending is at its highest level in over three years, driven by affordability improving faster than house prices are rising.
2. You Don’t Need a 20% Deposit
A huge misconception is that first-home buyers need a 20% deposit. The reality? Many buyers are entering the market with 10% or even 5% deposits.
This flexibility is a major factor in why buying your first home just got easier. The transcript highlights:
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46% of first-home approvals are now low-equity loans (under 20% deposit)
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This is expected to pass 50% over summer
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The average low-equity first-home loan is $639,000, suggesting a typical purchase price around $700,000
There are income caps for the 5% pathway ($95k for singles, $150k for couples/households), but the rolling 12-month average means buyers who recently received a pay rise often still qualify.
KiwiSaver plays a big role too. Many first-home buyers using a 10% deposit are pulling significant portions from KiwiSaver, and banks count KiwiSaver as genuine savings, which removes a major obstacle.
Parents helping out remains common – whether through gifting, loans, equity sharing or allowing their kids to live at home rent-free to save faster. But structuring this help correctly matters, and legal advice is essential to avoid future relationship-property complications.
3. Getting Pre-Approval Early Makes Everything Easier
The third major reason buying your first home is getting easier comes down to clarity: pre-approval gives you exact numbers, removes guesswork, and stops you from buying a property you can’t actually fund.
Speaking to a mortgage broker early means:
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You learn your borrowing power
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You understand how much deposit you truly need
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You get guidance on whether to close credit cards, Afterpay, or student loans
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Your spending patterns can be explained to the bank, rather than judged in isolation
Skipping pre-approval can be catastrophic. Mike recalls someone purchasing a $1.8m home on a $90k salary without checking lending first – a situation you never want to find yourself in.
Pre-approval also uncovers issues early, such as insurance restrictions or past financial behaviour that might affect your ability to secure cover.
4. Due Diligence Is Easier (and Safer) Than You Think
Whether it’s a new build or an existing property, understanding due diligence is essential.
For new builds, due diligence focuses on contracts, plans, and future valuations.
For existing homes, it’s all about inspections: moisture tests, building reports, LIMs, neighbourhood checks, flood-zone assessments, and more.
Sequencing your due diligence properly matters – start with the cheapest checks and save the big-ticket items for last. You don’t want to spend thousands on legal reviews only to find out the property is structurally unsound.
And yes, even if Dad is a builder, get the building report.
5. Auctions Are Out - Negotiations Are In
For years, auctions dominated first-home buying, forcing buyers to spend money on due diligence before even knowing if they had a chance.
Right now, that’s flipped.
Most properties are being sold by negotiation or deadline sale, meaning:
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You can agree on a price before spending money
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You get time to work through conditions
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You can complete due diligence without the pressure of auction day
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You’re not competing blindly
Negotiation is a great pathway for first-home buyers – it gives you certainty, time, and far less financial risk.
Key Takeaways
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Interest rates have dropped sharply, improving affordability and lowering test rates.
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Many first-home buyers are getting in with 5–10% deposits.
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KiwiSaver forms a major part of most first-home deposits and counts as genuine savings.
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Speaking to a mortgage broker early removes uncertainty and avoids costly mistakes.
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Proper due diligence protects you from hidden issues and unnecessary financial risk.
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Negotiation-based purchases give first-home buyers more control, time, and certainty.
Next Steps:
If you want to understand your borrowing power or your pathway into home ownership, book a session with Lighthouse Mortgages and take the next step with confidence.
If you’d like to learn more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
