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How a Flatmate Could Save You $$$






Awesome, you are thinking of buying your first home. While it might be nice to escape the idea of flatting, have you considered how much you could save actually having a flatmate? The answer is actually quite a lot, and it’s something we encourage first home buyers to consider if they are keen on paying off their mortgage quicker. 


Let’s take a look at an example:


Let’s say you have a mortgage of $600,000 on a 7% interest rate and you charge your flatmate $250 per week. Even if you only used $200 of that payment towards your mortgage, you could save $235,000 and nearly 8 years on the life of your loan!


Of course this scenario assumes you have a 7% interest rate and a flatmate for the term of your loan, but you can still see how much you will save making those early repayments!


So this all sounds good, but there are a few pointers to consider….


The first is you could be required to pay tax on the flatmate income, as it could be classed as income for tax purposes. Flatmate and boarders are considered differently by the IRD, so make sure you take a look at their website first. You can also calculate how much you might need to pay in tax, and this will help you decide how much to charge your flattie.


The second thing to consider is your loan structure. You will need to ensure that your loan is set up correctly to allow for additional repayments and that you won’t be penalised. If you are considering a flatmate, chat to us first and we can ensure you are set up with the right loan structure from the beginning.


Most banks and lenders will now consider flatmate income when assessing your borrowing capacity, so in most cases it can be included on your application form. There are some limitations however, with most lenders only allowing up to 2 flatmates and the amount they will allow included is usually up to $250 each (depending on the lender, this could be less).  


The banks will do their due diligence, so if you include flatmate income on your application form, they will check to ensure not only is the property accommodating enough for your flatmates, but also that you actually take them on. 


If you’d like to discuss buying a home and getting a flatmate in, then reach out to chat with us. We can advise you on the amount you can include in your application and anything else that you need to consider. Give us a call on 0800 005 676.


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