Key Concepts
- The idea of a House Deposit, and the different options available to help save enough money to purchase a propery.
- The different types of mortgages available, how they vary, the pros and cons of each.
- Managing expenses to ensure mortgage payments can be met.
How It Works
1. Initial Quiz
Students will start with the Home Ownership quiz, earning rewards for their correct answers.
2. Saving for a House Deposit
Once students have completed the Home Ownership quiz they will have a Home Deposit account added to their accounts, with a starting balance of $32,000. This account is designed to give them a boost as they begin saving for a house.
However, this deposit alone won’t be enough to purchase a property—they’ll need to save additional funds.
The Home Deposit account is standalone, meaning money cannot be transferred in or out of it. Students should look to other financial strategies to grow their savings.
For example, they can:
- Open an interest-bearing savings account and regularly transfer money into it to generate more savings.
- Combine their savings with funds from their Kiwisaver or Superannuation accounts.
These combined efforts will help students reach the financial threshold needed to buy a property.
3. Buying a Property
Once students have saved enough money, they can look to purchase a property from the Banqer Property Market.
Unlike the Renting expansion, where students can rent as a group, students can only purchase properties as individuals, not in groups.
The Property Market will be regularly updated, with a variety of properties at different prices available to purchase.
4. Applying for a Mortgage
After selecting a property they wish to purchase, students will need to complete a mortgage application within the platform.
Once their mortgage is approved, they’ll be prompted to set up an automatic payment to cover their loan repayments. Students who fail to set up automatic payments will incur a late fee.
Students can track their mortgage alongside their other accounts in the platform, allowing them to monitor their remaining balance and repayment progress.
5. Fixed vs. Variable Rate Mortgages
When applying for a mortgage, students will choose between a fixed rate or a variable rate. Each option has unique features and limitations:
-
Fixed Rate Mortgages:
- Monthly payments remain constant.
- Restructuring or adjusting payments is not allowed.
- Students cannot make extra mortgage repayments.
-
Variable Rate Mortgages:
- Payments may fluctuate with interest rate changes.
- Students can make one-off extra payments to reduce their balance.
- Mixed 50/50
A mixture of the above, with the ability to pay off some of the mortgage faster.
Once a mortgage is fully repaid, the account will disappear from the student’s dashboard, signaling that they’ve successfully paid off their home loan.
6. Live in property or rent
- If your students manage to buy a property, they can then decide whether to live in this property, or rent it out.
- If they are already renting a property, they will have to terminate their tenancy there, and they can then choose to rent the room in their own property.
- Alternatively, they can rent out their property to other students to earn money from the rent.
- If a student chooses to rent the property they have bought out, but then would like to live in it themselves, they cannot kick the current tenants out. They will have to wait for the tenant to choose to leave, or speak with their classmate to see if they would be open to leaving the property.
Teacher Tools
Property Overview: In the Property Expansion area you can view a Property Overview of where your students are living. If any of your students have purchased properties, this will be visible here, alongside information of those renting.
Property Market: You will be able to view the full property market that your students will see, showing all properties, their occupancy status, and their rental/purchase amounts.
See guide at the end of this article for a visual step through of these areas.
Lesson Support
To help guide your class through this expansion, a comprehensive Lesson Plan is available, including:
- Step-by-step instructions.
- Linked worksheets for in-class activities.
- Vocabulary builders to introduce key financial terms.
- Discussion ideas to promote classroom engagement and critical thinking.
- For information on how to enable expansions and access these resources, please see the related article here.