Govt mulls interest-free mortgages

Jacinda Ardern. Photo: NZ Herald
Jacinda Ardern. Photo: NZ Herald
New Zealanders seeking a home could be given access to a second, interest-free mortgage under a scheme being considered by the Government.

Prime Minister Jacinda Ardern said today the Government was considering a shared equity scheme as a way of making housing more affordable.

Shared equity involves a share of a mortgage being secured by a third party - usually the state or a government agency – as a second mortgage which attracts no interest.

It has to be repaid when the house is sold.

Ardern did not give any further detail, except to say it was one of several options being considered by the Government to make housing more accessible.

It appears that if the scheme went ahead, it would be limited to people on a modest income, or first-home buyers.

"We have been exploring the options available there, whether or not you have some upfront equity taken on by a third party to ease some of the … cost for the first-home buyer," Ardern said.

She would not say whether the Government would secure the interest-free portion of the loan.

"We are exploring all of the options at the moment," she said.

Ardern said people on lower incomes had "no chance" at the moment at buying homes in Auckland while the average sale price was $1 million.

A shared equity scheme has previously been trialled by the Helen Clark-led Labour Government.

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