We talk about the shared home ownership scheme being an alternative way to help first home buyers get into their own homes. It’s not always going to be the best option, but in some cases it may be the only viable option – and it’s better than not buying at all.
This is a real life example of where it helped Neil buy his first home.
Shared Home Ownership – When There Are Limited Options
Neil approached us in 2020 as he wanted to buy a home for his family. He had found a house in Taranaki for $330,000 but only had $21,000 for the deposit plus he had three defaults (paid) showing on his credit check.
He was definitely not in a situation to get a normal mortgage – there were not many options for low deposit bank mortgages and his credit issues put a stop to those anyway, and non-banks needed a minimum of 10% deposit.
The idea of shared home ownership with YouOwn was discussed and Neil agreed to proceed, and so they got into their own home. The finance was arranged with a 1st mortgage of $247,500 and YouOwn of $61,500 (19%) plus his deposit of $21,000.
Fast forward to 2024 and the house has increased in value to $441,000 and Neil wanted to refinance to buy out YouOwn. We contacted YouOwn and he could buy them out for $90,000 and we also managed to get the finance with a bank at very good rates as he now has over 20% equity / deposit.
The Cost With YouOwn
The real cost was $28,500 which was the difference in what they invested ($61,500) and what it cost to buy that share back ($90,000). Yes, there is an equity charge too but that is less than the interest rate that most lenders would charge and therefore we do not really consider that in these calculations.
At the same time the property had increased in value by $111,000 so even after deducting the cost of the shared ownership, Neil was $82,500 better off and that was at a time when New Zealand property values had not been increasing as much as they typically do.
The other way of looking at this is that Neil could have decided not to proceed and he would now have to pay $111,000 more for the same home!
What’s Next?
Learn more about shared home ownership.
It’s always a good idea to be well informed and that’s where we can help.
We have created an e-book that you can download for free.
You can also speak to an adviser who can look at your situation and help you decide if shared home ownership might be a good choice.
They are free and easy to speak with and will soon point you in the right direction for what you need to do to make sure that you can get as ready as possible, as soon as possible.
As mentioned when you’re buying a first home it can be a real benefit to get into the market early, before prices increase.
You want to get pre-approved so that when you do go shopping for your new home you can move quite quickly when you see the one that is perfectly suited.
Lets book a time to chat
James Puah
Mortgage Manager (Adviser)
As a financial and mortgage advisor, James Puah is here to help you to achieve your financial security and freedom through a tailored strategy to best suit your interests, aspirations and needs. Whether you are buying your first home, a new build, an investment property, looking to re-finance or re-fixing your mortgage, or if you are simply consolidating debt, require commercial lending, business lending, development fund, car loan, insurances, KiwiSaver and/or investments etc, James would love to hear from you and provide an optimum solution to cater to your requirements. James is passionate about finding out more about your financial aspirations and goals so that he can help you head in the right direction. James is multilingual; he is fluent in English, Mandarin and Taiwanese Hokkien.
Stuart Wills
Mortgage Manager (Senior Adviser)
Stuart is based from offices in Hobsonville in Auckland and is known as a comprehensive mortgage adviser who has in-depth knowledge in helping people buy their first homes, helping self-employed people to get a home loan and other finance, help people with new build finance and helping those people that need non-bank finance. Don’t worry if you are not in Auckland as Stuart will work with people throughout New Zealand and overseas too.
Jesica Muliawan
Mortgage Manager (Adviser)
Jesica is a dedicated mortgage adviser with a passion for people and property, committed to helping people navigate the home loan process with confidence. She believes property ownership is a powerful pathway to financial freedom and works closely with her clients to help them build long-term wealth. With a strong background in construction, finance and property, she understands the challenges of securing the right mortgage and ensures her clients receive expert guidance every step of the way.
Nicola Petersen
Mortgage Manager (Adviser)
Nicola has over 20-years experience with property and she believes that getting the home loan approved and set up properly is as important as finding the right home. She loves helping first home buyers, guiding them through all aspects of getting ready to buy, getting the finance pre-approval and of course helping finalise the finance that is required. When she’s not helping first/next-home buyers and investors secure the best home loan deals, she likes to explore the many beaches of Auckland’s Hibiscus Coast and North Shore with her husband and two kids.
Yatin Kainth
Mortgage Manager (Adviser)
Yatin is a dynamic professional who works as a Mortgage Advisor at Mortgage Managers. He is dedicated to providing exceptional support and guidance to his clients, ensuring a seamless and efficient process for getting the home loans approved and then the ongoing management of the loans.
Sunil Kumar
Mortgage Manager (Adviser)
Sunil is a mortgage adviser with experience with first home buyers and existing home owners, but also with extra specialities for helping people that also have income from rideshare platforms and for property investors including arranging finance for boarding houses. He is able to understand and assist a wide range of people in different situations by providing the most ideal mortgage approach. Speaking fluent English, Hindi, Haryanvi, Punjabi and Fijian, Don’t worry if you are not in Auckland as he will work with people throughout New Zealand and overseas as well.
