Getting help from family

There are different ways that first home buyers can get financial help from parents or family members to boost their deposit and avoid paying a low equity interest rate premium.^ Here’s an overview of the options and factors to consider.

Contact an expert

1. Family assisted lending

Family assisted lending, also known as joint borrowing or co-borrowing, is an increasingly popular option.

This involves multiple loans - usually a larger one in your name that’s secured by your home, and a smaller joint loan, secured by both your home and your co-borrower’s home.

  • No money required upfront from parents/family members, but they need to be able to afford the loan amount they’re committing to
  • Their liability is restricted only to the shared loan
  • The loan can be structured over a shorter term for faster payoff
  • They can see the loan balance at any time through Internet Banking or the BNZ app

An example of family assisted lending

Your deposit

Your deposit is how much you’ve saved up to put towards your home. That might be 10% of the total purchase price.

Your home loan

You borrow 80% from a bank and pay off your mortgage over a number of years.

Joint loan

You take out a joint loan for 10% with your parents. This shared loan is secured against both of your properties.

2. Gifted funds

Gifted funds are when someone else gives you money towards a deposit and doesn’t expect it to be repaid. 

  • You’ll need evidence (like a gifting certificate) to show this money is a gift, and does not need to be paid back

3. Borrowed funds

Borrowed funds are when someone contributes some money towards a deposit with an agreement that the money will be repaid. This could be when the home is sold, or when you’re in a position to repay the loan.

  • Suited to situations where the parent/family member needs the money back later
  • It’s a good idea to document the repayment terms you agree to
  • If you’re making regular repayments to them, we may need to include this expense in your home loan application

4. Guarantees

A guarantee is when a home owned by someone else, such as your parents, is used as extra security to ‘guarantee’ your loan. This means they will be responsible for some or all of your loan, if you’re not able to make your repayments.

  • No money required upfront from the guarantor 
  • They need to be able to afford the guaranteed part of the loan 
  • They will be responsible for some or all of your loan if you fall behind on paying it. If they can’t meet the repayments, then their home may be sold to repay your loan

Understanding your options

Whether you’re receiving or giving financial help to buy a home, talk to us early so you know what the options are.

Know what you’re getting into

Everyone involved should understand all their obligations under the arrangement.

Get professional advice

It’s usually a good idea to get legal advice before committing to any agreement.

Explore other options

Shared ownership

We’ve teamed up with organisations that provide shared ownership programmes to help first home buyers with a low deposit.

More about shared ownership

New builds

If you’re buying a new build, or buying a property off plans (still under construction), deposit requirements can be flexible.

More about buying a new build

Help from parents

Your parents might be able to help by gifting or loaning money towards a deposit, or acting as guarantors or co-borrowers.

More about getting parental help

Get in touch

Talk to a Mobile Mortgage Manager

Mobile Mortgage Managers cover both city and rural areas across New Zealand. We’re available seven days a week, and can come to you, where and when it suits.

Find a mortgage manager

Get a call back from a home loan expert

One of our loan experts can give you a call to talk you through your options. Contact us online, or through Internet Banking or the BNZ app.

Arrange a call back

Home loans help and support

If you need some help call 0800 275 269.