Question from Orchille updated on 21st September 2016:
Would it be a good move to get a 20% home loan and then, after three months or so, convert it to an investment property? What would be the advantages or disadvantages? Or would it be worthwhile waiting to save up for the 30% investment property in Auckland? This will be my first property purchase. I haven't purchased my home yet as I prefer living in the city. I just want to save on initial costs as I'd rather spend it on renovation.
Our expert Kris Pedersen responded:
Where this is hard to advise is that the Reserve Bank has implemented further restrictions in the investment space. This means that if your plan was to go for option two, the rules have changed and you may need longer to get a 40% deposit sorted. You also need to think about long term which is better for you - both from an investment point of view and also what fits best into your lifestyle.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz