When it comes to getting a new home loan or refinancing a property, many high-income households face a choice of working with a personal banker through private banking or engaging a mortgage broker. If you have a personal banker (also known as a private banker), your initial instinct may be to contact them regarding your
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Debt-to-income (DTI) rules restrict a borrower’s debt to a set multiple of their income. Various countries have employed DTIs for mortgage applications, because they can be an effective tool for ensuring loan affordability. Recently, the Reserve Bank has been gearing up to introduce DTIs in New Zealand. This article covers the Reserve Bank’s recent announcements
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With the current perfect storm of rising cost of living and higher interest rates, it might be almost impossible to buy a first home with a deposit that’s less than 10% – unless you qualify for low income government assistance. Even with help from the government, the challenge can be affording the home loan repayments,
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Many home owners are getting ready for a substantial rise in their mortgage payments, as their one and two-year fixed interest rate deals conclude. While every household’s circumstances differ, it’s safe to assume that the extra interest expense will pose a challenge for the majority of borrowers. If you’re concerned about how to handle this
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A property is one of the most expensive things you’ll ever buy. The amount you borrow and the interest you’ll pay over decades can be huge. So, whether you’re looking for a new mortgage or reviewing the one you have, it’s worth investing some time into getting the best arrangement for your current circumstances and
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Buying a house to live in is the number one Kiwi strategy for getting ahead. Not only do you get a place to call your own, you have a stake in the New Zealand property market. Many people firmly believe that property values double every 10 years and data reveals it’s a reality for much
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This article provides information on working with a mortgage adviser when you’re refinancing a mortgage. We also have a free service that connects you with one of New Zealand’s mortgage advisers from our handpicked panel. First up, let’s define ‘refinancing’. It can be a confusing word, because it’s often used to describe the process of
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An independent survey of 2,000 New Zealanders has revealed that people who get professional financial advice show good financial behaviours more frequently than those who don’t. No matter what they earn, Kiwis who get financial advice were shown to be more: Confident about making major financial decisions Positive about where they’re at financially Prepared for
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If your mortgage application has been declined, it may help to know you’re not alone. Less than half of all applications are approved these days. While the new lending rules have certainly made things more challenging, declined applications have always been more common than you might think. At this point you’ve put in an application
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If you’re looking at getting a home loan or refinancing, the new rules around lending might feel like a bucket of ice water over your head. We all knew lending criteria were about to tighten, but the reality has taken a lot of people by surprise. As with any other sort of change it helps
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There are two main types of mortgage insurance – mortgage repayment protection insurance and lenders’ mortgage insurance. The first is similar to the other types of personal insurance, like life cover and income protection, so this article is mainly focused on lenders’ mortgage insurance. What is mortgage protection insurance? This is a form of income
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Creating future retirement income by buying investment properties is a time-honoured way to build your wealth, so you can achieve freedom from work. And we’re not just talking about retirement in your mid-60s. There’s a global movement called FIRE (financial independence, retire early) that attracts younger followers. So whether you’re an empty-nester looking forward to
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Low equity margin (LEM), aka low equity premium (LEP), is the price you pay for having a smaller-than-optimum deposit for the property you want to buy. It’s either an extra bit of interest that’s added to the going rates or a one-off fee that’s added to your loan. As house prices creep up, it’s getting
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Choosing whether to build from scratch or buy an existing home is a question that many Kiwis struggle with. The decision outcome is highly individual. It depends on where in New Zealand you live, how much you want to spend and your ability to be approved for a home loan of the required size. Personal
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Also known as a ‘variable mortgage’ or ‘floating home loan’, a floating rate mortgage has an interest rate that can increase or decrease at any time. That means your regular repayments can also change. The other downside is that floating interest rates are usually higher than fixed rates. The main advantage of a floating mortgage
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When a home loan lender is checking you out as a potential borrower, they’ll take a long, hard look at your credit score, which is a number between 0 and 1000. Lenders refer to your credit score because they need to ensure the loan they provide will be repaid. Having a high number could make
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The short answer to this intriguing question is ‘as often as you want to’. Refinancing, aka remortgaging, can be something you do regularly, to either save money with a better interest rate, adjust your repayments or release some equity to achieve life goals. However, refinancing always involves some cost. Also, if you apply for a
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Whether you’re a sole trader, a freelancer, in a partnership with someone or a director of a limited company, being your own boss comes with a lot of satisfaction. However, when you want to get a mortgage – for your home or an investment property – mainstream bank lenders will ask you to jump a
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The golden rule for the minimum deposit required to buy a first house is 20%. But there are opportunities to get a home loan with a deposit as low as 10% or even 5%, in special circumstances. In this guide, we look at major bank lenders’ approaches to lending money for first home buyers. We
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Whether you’re buying your first home, next home or an investment property, you might need to get a registered valuation to finalise your home loan. What happens if that valuation isn’t high enough? If you’ve purchased a property at auction and there’s a shortfall between the amount you need to borrow and the amount supported
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Bridging finance can help when buying or building a new house before selling your old one. In other words bridging finance lets you get from property A to property B, before you get the money for property A. However, a bridging loan is just a temporary structure. You need to repay it as soon as
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Back in the mid-1980s, it was perfectly normal to pay around 20% interest for your home loan. Sure, houses were a lot cheaper back then, but the every-month reality of getting charged 20 cents for every dollar you borrowed was pretty hard to live with. Since 2008, mortgage rates have been tracking ever-lower. We all
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The question ‘how long should I fix my mortgage for’ has much in common with questions like ‘what are interest rates going to do?’, ‘how much can I save in a year’ and ‘what should I name my first born’? The best answer depends on crystal ball gazing, personal circumstances and market analysis. While we
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Property investment has been big news over recent years. Low interest rates and soaring demand for property increased FOMO to record levels, so properties suitable for investment were being snapped up as quickly as they appeared. In response, the government moved the bright line for capital gains tax and is gradually phasing out property investors’
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One of the simplest ways to see what your regular mortgage repayments would be is to use our mortgage repayments calculator. You can also use it to check the effect of increasing or decreasing your regular repayments, or making a lump sum repayment at some point during the term of your mortgage. And if you’re
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If you’re 60 or older and own a home, a reverse mortgage lets you borrow money to live a more comfortable retirement and not repay the loan or accumulated interest until your home is eventually sold. If you wish, you can also make repayments along the way to reduce the amount borrowed and interest charged.
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An offset mortgage lets you use money in a separate account (savings or everyday) to effectively reduce the balance of your mortgage when it comes to calculating the interest charged. The money stays in its own account and is available as usual, but simply offsets your home loan balance – hence the name. How does
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As its name suggests, an interest-only mortgage means your regular weekly, fortnightly or monthly repayments only include the interest charged. So you don’t repay any of the money you borrowed (known as the principal) until the end. The agreed length, or term, of an interest-only loan is usually a year or two, but it can
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When you originally set up your mortgage, it would have been subject to the floating and fixed lending rates for that particular day, with your specific bank. But things change over the years. It could be time for a re-look, with a view to saving some interest or improving your financial flexibility. Why would you
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Getting a mortgage is a big deal. Where do you go to find the best lender for your circumstances? What criteria will you have to meet? When and how do you apply? There are so many questions to navigate. Fortunately, mortgage brokers have many of the answers. A mortgage broker is an expert when it
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Many people find themselves in retirement with less money than they expected, or a cost of living that’s way more than they imagined. They’ve worked hard for decades and paid off the mortgage, or very nearly, but for all sorts of reasons their retirement savings are a bit light. Their superannuation barely covers the basic
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