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To rent or to buy?

To rent or to buy?

The Kiwi dream — buying your first home and getting your name attached to the mortgage! The idea of paying off your own mortgage instead of paying someone else's, seems like the ideal situation but there are many factors to consider when you’re thinking about making the transition from renting to owning.

The first thing you need to consider is where you buy in New Zealand. I’d love to say that everyone is in the same boat, but the reality is, buying a house in Timaru is not the same as buying a house in Christchurch and neither of those are the same as buying a home in Auckland. This post is designed to educate you further about the hidden costs that come with owning a home, compared to renting.

If you’ve never owned a home before then you’d probably never of known these expenses even exist. Rates, insurance and mortgage repayments are the three main expenses. On top of that, we have repairs and maintenance, unfilled rooms (if you’re having boarders or renting out your property) and then also life insurance and income protection (there will be a full post coming up on this soon).

Buying a home will be one of your biggest decisions and transactions in your life, so let’s make sure you do your ‘due diligence’. Don’t just buy a home because all your friends are doing it. Do the maths, and make sure that you’re going to be better off. At the end of the day, buying a home is like any other investment, and you want the best return for your money. My best advice would be to educate yourself, then get advice from the best professionals.

To purchase a home it’s always key to first work out the amount you can loan, and how much your weekly payments would be. To work this out, take the purchase price of the house, and then minus your deposit. Further information on first home deposits, KiwiSaver and the Home Start Grant can be found on these prior posts.

Most banks nowadays have useful repayment calculators on their websites —  Here's the ANZ Calculator. Once you know our loan amount, utilize this handy tool which will provide you with a weekly, fortnightly or monthly amount, which you can compare to your current rental payments.

The next cost to consider is insurance. Events happen, whether they are natural disasters or accidents. Quotes can be done easily online through various companies, so jump online and get an estimate for your potential home.

Then there are rates — Rates are a ‘tax’ charged by local councils to help pay for the services they provide the community. Rates vary from place to place, but they’re always based on the value of the property — To see the yearly rates amount for your potential home, search the address on the appropriate council website. For CHCH, you’ll find such information here, and for Auckland here

Now you have your three major expenses that are compulsory when it comes to owning a home.

Also important to keep in mind is repairs and maintenance for your property — These can be costly. This is something to consider when purchasing a home. Are you a handyman who can tackle any problem, or would you rather purchase a new build and not have to worry this!

Once you’ve figured out your mortgage, insurance, rates and R&M costs, I’d break these down into a weekly figure. I’d then compare this to your current rental repayments.

If it seems manageable and you’re keen to put an offer in on the property, start living with your new costs and put away the money that you would be paying towards your new home in a savings account each week — This is a good test to see if you’re ready to increase your expenses and own a home.

On a final note, open up Google sheets and start doing this exercise for each house you like the look of — Educate yourself and do your market research. Record what each property goes for, and don’t be afraid to talk to real estate agents or other professionals!


  • Buying a home will be one of your biggest decisions and transactions in your life, so let’s make sure you do your ‘due diligence’.
  • Do the maths, and work out your Loan Repayments, Rates and Insurance
  • Start with what makes up your deposit — Post Here
  • Break this down into a weekly figure and compare to your current situation
  • If it seems manageable, start putting that weekly amount into a savings account and pretend like you already have those expenses
  • Consider the type of house you want, extra room for boarders, a new home with less maintenance or are you a handyman?
  • Start a Google Sheet, and do this exercise for each property you’re interested in. Also record how much the properties sell for — Don’t be afraid to ask Real Estate Agents
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Humbly Healthy — Top Tips for eating (slightly trim) on a slim budget.

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