A guide to different mortgage terms across the Tasman
Over recent years, tens of thousands of New Zealanders have migrated to Australia with Western Australia becoming an increasingly popular choice. While buying a home follows similar processes, the terminology used can differ significantly.
From low-deposit lending rules to first-home buyer schemes and mortgage structures, understanding these differences can make the process feel less overwhelming. This guide breaks down some of the key mortgage terms used in both Western Australia and New Zealand so you can navigate the mortgage process confidently, wherever you decide to place your roots.
We help many clients who have recently moved here from New Zealand, get in touch if you want to know more about buying in Western Australia.
Low Deposit Lending Rules
If you are borrowing more than 80% of a property’s value, lenders will charge you for that risk in different ways.
Western Australia - LMI: Lenders Mortgage Insurance
A lump sum paid at settlement or added to your loan. On a $800,000 loan at 90% loan to value ratio (LVR), expect to pay $19,000+. This cost is an insurance for the lender not the client.
New Zealand - LEM: Low Equity Margin or LEP: Low Equity Premium
An additional margin added to your interest rate (typically 0.25% to 1.5% p.a.). This will be charged until your LVR drops to 80% or below.
Home Deposit Savings Schemes
Both countries have a government-managed savings scheme designed primarily for retirement but also allow first-home buyers to access those funds early.
Western Australia - FHSSS (First Home Super Saver Scheme)
The First Home Super Saver Scheme (FHSSS) lets you make extra voluntary contributions to super and later withdraw up to $50,000 for a deposit. Superannuation itself cannot be accessed for a home purchase.
New Zealand - KiwiSaver
A voluntary work-based savings scheme. First-home buyers can withdraw most of their balance (you must leave $1,000 in the account) after 3 years of contribution. Straightforward to access and widely used as a deposit top-up.
First Home Buyer Schemes (5% Deposit)
Both governments offer support to help first-home buyers into the market with a smaller deposit.
Western Australia - Australian Government 5% Deposit Scheme
Requires a minimum 5% deposit for standard buyers or a 2% deposit for eligible single parents. This waives the need to pay Lenders Mortgage Insurance (LMI) by having the government guarantee up to 15% of the loan.
New Zealand - Kainga Ora First Home Loan (handled through supporting lenders)
Requires a minimum 5% deposit for standard buyers. Eligibility is determined by regional house price caps and household income limits.
Pre-Purchase Reports
Western Australia
Building & Pest Inspection - structural assessment with a focus on plumbing/drainage and termite/pest activity. Bushfire compliance and UV exposure are separate assessments which may be required in certain areas.
New Zealand
Builder’s Report - structural assessment with a focus on weathertightness. Ensuring it is built to withstand high seismic activity (earthquakes).
LIM (Land Information Memorandum) Report - official document issued by local council of all information it holds on the property including consents, natural hazards, zoning etc.
Stamp Duty
Western Australia
A state government tax charged on the purchase price of the property. In WA, rates are progressive from 1.9% to 5.15%. On a $800,000 home, you'd pay approximately $32,000. First-home buyers may qualify for exemptions or concessions
New Zealand
New Zealand does not have a stamp duty or property transfer tax. You won't pay a government tax simply for buying a property which keeps upfront costs significantly lower.
Mortgage Structures - Fixed vs Variable Rates
Western Australia
Variable rate mortgages are common in Australia which means your interest rate moves up and down in line with the Reserve Bank of Australia’s (RBA) cash rate decisions.
- Variable rates allow extra repayments and refinancing without break costs.
- Offset accounts are widely used with variable loans to reduce the interest calculated on your mortgage.
New Zealand
Most borrowers fix their mortgage rate for 1 to 2 years. Any changes made by the Reserve Bank of New Zealand (RBNZ) will not affect fixed rates currently locked in.
- Fixed rates allow certainty in repayments however, any changes prior to the expiry date will incur a break cost.
- Floating rates (variable) exist but are typically higher and only used for offsets or revolving credit loans.
While many aspects of buying property are similar in both countries, the differences in mortgage structures, government schemes and upfront costs can have a significant impact on your budget and borrowing strategy.
If you’re moving from New Zealand to Western Australia, working with a mortgage broker can help simplify the process and ensure you understand your options from the beginning.
Get in touch to learn more.
