Buying your first home is a major milestone. For many New Zealanders, buying with a partner, friend or family member makes homeownership feel more achievable. Combining incomes and savings may help you afford a property that would be difficult to buy alone.
But what happens when one person has a much bigger deposit than the other? Perhaps one buyer has saved for years, while the other is just starting to build their savings. One person might also receive a financial gift from their family. Whatever the reason, contributing different amounts can raise important questions about ownership, mortgage repayments and what happens if circumstances change.
Before buying a property together, it is important to understand how a joint home loan works, agree on financial responsibilities and get the right legal advice.
Can You Buy a House Together With Different Deposits in NZ?
Yes. Two or more people can buy a property together even if they contribute different amounts towards the deposit. However, the lender must be satisfied that the proposed borrowers meet its lending requirements.
For example, imagine two first-home buyers purchasing a property for $700,000:
- Buyer A contributes a $100,000 deposit
- Buyer B contributes a $40,000 deposit
- Together, they contribute $140,000
- They need a mortgage of $560,000 before any other costs
Their combined deposit is 20% of the purchase price. However, Buyer A has contributed considerably more of their own money.
The key question is not just whether they can secure a joint home loan. It is also how they want to record their contributions, share ownership and manage their responsibilities over time.
A larger deposit does not automatically mean one person will own a larger share of the property. Ownership arrangements should be discussed and documented with a lawyer before the purchase is completed.
How Does a Joint Home Loan Work?
A joint home loan allows multiple borrowers to apply for mortgage finance together. The lender will generally assess each applicant's income, expenses, debts, credit history and overall ability to meet the repayments.
Combining incomes may improve your borrowing capacity, but it does not guarantee approval. Existing personal loans, credit card balances, car finance and other financial commitments can affect the lender's assessment.
What Will the Lender Assess?
When applying for a joint home loan in NZ, you may need to provide:
- Proof of income and employment
- Bank statements and details of regular expenses
- Information about existing debts and financial commitments
- Evidence of your deposit and where the funds came from
- Identification and other documents requested by the lender
The lender will also assess the proposed property and the amount you want to borrow.
If you are buying your first home, a mortgage pre-approval can help you understand your potential budget before making an offer. Remember that pre-approval is subject to conditions and is not always a final loan approval.
Does the Person With the Bigger Deposit Own More of the House?
Not necessarily. The amount each person contributes and the way legal ownership is recorded are related, but they are not automatically the same thing.
In New Zealand, co-owners may hold property as joint tenants or tenants in common. These arrangements have different legal implications, so you should understand which option suits your circumstances. For example, two buyers might agree to contribute different deposits but own the property in equal shares. Alternatively, they may wish to record different ownership shares.
However, couples should not assume that registering unequal shares on the property title will, by itself, protect their contributions if their relationship ends. The Property (Relationships) Act 1976 may affect how property is treated when a qualifying relationship ends. The legal position depends on the circumstances, including the nature and length of the relationship and any valid agreement in place.
Before committing to a purchase, speak with an independent property lawyer. They can explain your options and whether a property-sharing or contracting-out agreement is appropriate.
What Is a Co-Ownership Agreement?
A co-ownership agreement sets out how people intend to manage a property they own together. It can help clarify expectations before disagreements arise.
Depending on your circumstances, the agreement may cover:
- Each person's deposit contribution
- How mortgage repayments will be shared
- How rates, insurance, repairs and maintenance will be paid
- How ownership interests and future sale proceeds will be handled
- What happens if one owner wants to sell their share
- What happens if an owner cannot afford their share of the costs
- How the property will be valued if one person wants to buy out another
For couples, a lawyer may also recommend a contracting-out agreement under the Property (Relationships) Act, depending on the situation.
A standard co-ownership agreement may not deal with every relationship-property issue. Ask your lawyer which documents you need and make sure everyone receives independent legal advice where appropriate.
How Should You Split Mortgage Repayments?
Your deposit is only one part of the cost of buying a home. You will also need a plan for ongoing mortgage repayments and other household expenses.
Some buyers agree to split the mortgage repayments equally. Others divide them according to their incomes or another arrangement they both consider fair. For instance, one person might contribute more towards the deposit while both borrowers pay equal amounts each month. Another arrangement might involve different repayment contributions. The important thing is to agree on the arrangement before settlement and understand the lender's requirements.
Remember: your private agreement with the other owner does not necessarily limit your obligations to the lender. If you are jointly liable for the mortgage, one borrower may be responsible for the full debt if the other fails to pay, depending on the loan terms.
Before signing, ask the lender or mortgage adviser to explain the proposed loan structure and make sure you understand the risks.
Can You Use KiwiSaver for a Joint First-Home Purchase?
Eligible first-home buyers may be able to withdraw KiwiSaver savings to help fund a property purchase, subject to the applicable eligibility rules.
If both buyers qualify, each may be able to use their own eligible KiwiSaver savings towards the purchase. However, eligibility depends on individual circumstances, and the funds must be withdrawn in line with the scheme's requirements.
Do not assume that buying with another person automatically makes both applicants eligible. Check the current KiwiSaver first-home withdrawal rules and speak with your provider early enough to meet the purchase timetable.
You should also budget for costs beyond the deposit, including legal fees, building inspections, valuations, insurance and moving expenses.
What if One Person Wants to Sell Later?
Your circumstances may change. One owner might want to move to another city, start a family, end a relationship or buy a different property. Before purchasing together, discuss what would happen if one person wanted to leave the arrangement.
Possible options may include:
Buying out the other owner
One owner buys the other's share, subject to suitable funding and lender approval.Selling the property
The property is sold and the proceeds distributed according to the applicable legal arrangements.Agreeing another solution
Both owners agree an alternative arrangement with professional advice.
A buyout is not always straightforward. The remaining owner must be able to afford the mortgage, and the lender will need to approve any changes to the borrowing arrangements. The property's value, outstanding mortgage and legal ownership arrangements may also affect the outcome.
Agreeing on a process before you buy can help reduce uncertainty later.
How Can a First-Home Buyer Mortgage Broker Help?
When you are buying with another person, it is useful to understand your borrowing options before committing to a property.
A first-home buyer mortgage broker can help you review your financial position, understand potential lending options and prepare your joint home loan application. They may also help you compare lenders and understand the documents required. This can be particularly useful when one buyer has a larger deposit, one applicant is self-employed, or your incomes and financial commitments are different.
A mortgage broker does not replace a lawyer. Your broker can help with mortgage finance, while a property lawyer can advise on ownership shares, agreements and legal responsibilities. The aim is to understand both sides of the purchase before you sign a sale and purchase agreement or commit to a mortgage.
Ready to Explore Your First-Home Loan Options?
Buying a house together can make homeownership more achievable, even when one person has a larger deposit. The key is to understand your borrowing capacity, agree on financial responsibilities and arrange the right legal protections before committing to a property.
This article provides general information only and is not financial or legal advice. Lending approval depends on individual circumstances and lender criteria. Seek independent legal advice about ownership and relationship-property arrangements.
FAQ
Can two people buy a house together if one has a smaller deposit?
Yes. People can buy together with different deposit contributions, provided they meet the lender's requirements. You should agree on ownership and financial responsibilities before purchasing.
Does a bigger deposit mean a bigger ownership share?
Not automatically. Ownership depends on the legal arrangements and the circumstances. Speak with a lawyer about how to record your intentions and protect your interests.
Can unmarried couples apply for a joint home loan in NZ?
Unmarried couples may apply jointly for a home loan, subject to the lender's requirements. They should also obtain legal advice about ownership and relationship-property considerations.
Can both buyers use KiwiSaver for their first home?
Potentially, if each buyer meets the applicable KiwiSaver first-home withdrawal requirements. Check eligibility with your KiwiSaver provider before relying on the funds for settlement.
Are both borrowers responsible for the full mortgage?
The answer depends on the loan agreement. Joint borrowers may be liable for the full outstanding debt, not merely the portion they have agreed between themselves to pay. Always confirm the terms with the lender.
Should we get a legal agreement before buying together?
Yes, it is sensible to seek independent legal advice before purchasing. A lawyer can explain whether you need a co-ownership agreement, a contracting-out agreement or other documents suited to your circumstances.
