A Dunedin woman renting at $400 a week says she's stuck renting for life despite having $90,000 sitting in KiwiSaver, because current withdrawal rules cap how much she's allowed to hold in other savings. She previously owned a home with a former partner but never used KiwiSaver to buy it, and now wants to purchase again on her own.
The rules let previous homeowners access KiwiSaver as a "second-chance" buyer if Kāinga Ora assesses them as being in a similar position to a first-home buyer, which means their other assets can't exceed a regional cap. In Dunedin that cap sits at $80,000. With $160,000 in savings, she's over the limit and locked out of her own KiwiSaver, even though using it could set her up with a manageable mortgage she could realistically pay off before retirement.
Jeremy Andrews, mortgage adviser Whangarei with Key Mortgages, said this situation comes up a few times a year. If a home was sold and the KiwiSaver wasn't withdrawn for that purchase, there's often still a good chance clients can put it toward a new one. He noted the regional asset caps vary quite a bit, from around $80,000 in some regions to $120,000 in Whangārei, up to $175,000 in Auckland, Queenstown or Thames, and that the asset test covers more than cash savings. Term deposits, shares, a second or non-daily-driver vehicle, caravan, boat, and other major assets over $5000 all get counted.
For anyone who's owned property before and isn't sure where they stand, it's worth getting proper advice before assuming KiwiSaver is off the table. Key Mortgages helps clients work through exactly this kind of scenario regularly.
Full article here: $90,000 in KiwiSaver but 'renting for life'
The Otago Times describes a Dunedin woman with $90,000 in KiwiSaver still can't buy a home in part due to strict asset caps. Key Mortgages explains when KiwiSaver can help second-chance buyers.
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Key Mortgages recently joined Ryan Bridge on Newstalk ZB, to discuss the recent jump in mortgage rates and what it means for Kiwi borrowers.
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