Helping you choose the right home loan 
Helping you choose the right home loan
If you want to buy a house, or some other large asset, then typically you will borrow some money from a lender (e.g. a bank) and pay it back to them over an agreed timeframe. Because you are “using” their money, they will charge you a fee - called interest. Interest paid on a mortgage can be either a fixed rate or a floating rate, which means it either stays constant for a time or moves up and down variably.
Whether you are a first-time home buyer or a seasoned property investor, the process of finding the right mortgage can be filled with stress and emotion.
A house will most likely be your most expensive purchase, so you want to be sure that it is an asset and not a liability. Obtaining the right mortgage will be a deciding factor. That's because undisclosed fees or higher-than-expected interest rates can be unpleasant financial surprises, while unexpected delays in the mortgage process will make it difficult to plan your departure from your current residence.
We'll help you choose the right home loan and repayment plan to suit your needs. Better still, it's completely free for you as the banks pay us to provide this service!
There are many types of home loans in New Zealand, each with its own combination of interest rates, fees and flexibility. All these things affect how much the loan costs you and when it will be paid off. Your interest rate may be fixed, floating or a mix of both. And there are different repayment structures to choose between.
With a fixed rate home loan the interest rate you pay is fixed for a period of six months to five years. At the end of the term, you can choose to re-fix again for a new term or move to a floating rate. Capped rates are a variation where the interest rate can't rise, but will drop if floating rates drop below the capped rate.
Lenders of floating rate home loans will lift or lower the interest rate as interest rates in the market change. This means your repayments may go up or down, but this type of home loan gives you the greatest flexibility.
You can also split home loans between fixed and floating rates. This lets you make extra repayments without charge on the floating rate portion. Splitting your home loan in New Zealand can give you a balance between the certainty of a fixed rate and the flexibility of a floating rate. How much of your home loan you have in each portion depends on which of these is more important to you.
Revolving credit home loans work like a large overdraft. Your pay goes straight into the account and bills are paid out of the account when they're due. By keeping the loan as low as you can at any time, you pay less interest because lenders calculate interest daily. You can make lump sum repayments and re-draw money up to your limit. Some revolving credit home loans in New Zealand gradually reduce the credit limit to help you pay off the loan.
Buying a home is a big responsibility. And it's commitment that affects not only you, but also your family. The last thing you'll want to see is your home slip out of your hands if for some reason you can't meet your repayments.
What would happen if you were unable to work for a period of time or worse still, were no longer around? Would you have the resources to keep paying off your home loan, and safeguard your family's future? Mortgage insurance can give you peace of mind in situations such as these.
Life Cover - Provides a lump-sum payment if you die, which can allow your family to repay the mortgage in full, depending on the level of cover.
Trauma Insurance - Pays a lump sum if you are diagnosed with a defined critical illness, such as heart attack or cancer, giving you the option to pay off some or all of the mortgage and maintain your lifestyle.
Redundancy Cover is available on certain policies and provides cover for your monthly mortgage repayments for a fixed period of time if you are made redundant.
If you have a mortgage in New Zealand, it's a good idea to protect yourself against all eventualities with mortgage protection insurance. SHARE advisers can offer a number of ways to ensure your home stays in your hands.
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