It takes more than just a good income to unlock the front door of your own house.

There's good news and bad news for first-home buyers.



The good: You do not have to have a 20 per cent deposit to get a home loan.



The bad: Even if you are earning a good income, you will struggle if you try to buy alone.



That is according to mortgage broker Campbell Hastie, of Go2Guys.

READ MORE: Are you spending your house deposit on your kids?

He said many people did not realise that there were still opportunities for people with a deposit of less than 20 per cent to buy a house.

BEVAN READ/FAIRFAX NZ Campbell Hastie says some people might be surprised at how much income they need.

Under the loan-to-value restrictions, banks can lend up to 10 per cent of their new lending to owner-occupiers with a small deposit.

"If you've got good income and can show good behaviour then 90 per cent on an existing property is totally possible."

New builds are exempt from the rules.

But he said the banks were much more wary about the servicing ability of buyers at that level, and even someone earning $85,000 - or about $20,000 more than the median income in New Zealand - would struggle to get across the line.

In Auckland, he said a single person earning $85,000, wanting to buy a house worth $650,000 with $65,000 deposit and no other debts or credit cards would probably be turned down by ASB, ANZ, BNZ and Westpac.

"How frustrating is that? You earn good dough, you've probably worked out that the repayments on the loan would fit your budget, but you'll be stuck renting because you 'don't earn enough'."

He did a similar calculation around the country and found that in Hamilton, Tauranga, Wellington and Christchurch, a buyer earning $85,000 would not get through banks' servicing tests if they wanted to buy an entry-level home.

Banks run servicing tests looking at living expenses including hire-purchase agreements, credit cards, KiwiSaver contributions, childcare and other costs against after-tax income.

They do their calculations based on repayments at a higher interest rate than that currently available in the market.

Hastie said the banks wanted to see at least $1000 surplus each month if they were lending to borrowers with less than 20 per cent deposit. Below that, he said it was not even worth submitting an application in most cases.

But in Hamilton, someone earning $85,000, with no kids, trying to buy a first-quartile priced house, costing about $400,000 would only have $769 a month left over after all their expenses were taken into account. In Tauranga, they would have $361 and in Christchurch $543. In Wellington, they would spend $319 more than they earned each month.

Hastie said it showed that two incomes were needed to buy in many areas around the country.

"People need to buddy-up and buy with a mate or a partner – one income might not cut it but two incomes probably will. There will probably be more deposit to throw in too which is always helpful even if the LVR doesn't drop to 80 per cent."

Corelogic data shows that, so far this year, 30 per cent of Auckland buyers have bought a house alone.

That is down from last year, when it was 32 per cent. Most houses are bought with two people on the title. This year, 11 per cent of deals have had three or more names on the title. In some cases this could indicate a house bought by a trust.

Hastie said parents who could act as guarantors should step up.

"Don't wait till you're dead to give your offspring the benefit of your equity. A guarantee is likely to only be a temporary thing anyway."

Gareth Kiernan, an economist at Infometrics, said the only way wage growth could be expected to catch up to house prices was if they started to fall.

"Wage growth is likely to pick up this year as the tightness in the labour market continues to spread beyond the construction and tourism sectors, but seems unlikely at this stage to accelerate rapidly," he said.

"Trying to ascertain the timing of any housing market correction is extremely difficult at the moment given the massive under-supply of housing in Auckland, the very stretched affordability ratios, and the apparent lack of capacity in the construction industry to increase the rate of house-building activity much further.

"The very high house-price-to-income ratio in Auckland raises questions about how much further house prices in the city can rise, but the under-supply of housing would seem to give little option apart from further house price increases until we see a greater supply response."