Kiwibank launches new mortgage facility
30/05/2011
Kiwibank has launched a new mortgage “offset” facility that will enable customers to reduce the amount of interest they pay and assist them to pay off their mortgages more quickly. It will also enable parents or other family members to assist with the mortgage.
Kiwibank Chief Executive Paul Brock said the bank is launching the new facility with a rate of 5.50% p.a., a savings of 0.15% p.a. on the existing variable home loan rate.
The scheme works by enabling customers to effectively consolidate their savings and everyday transaction account credit balances and net them off against their mortgage (debits) and only pay the mortgage interest on the difference. Parents, partners & childrens can also have their savings and everyday accounts built into the equation and effectively sacrifice the interest they would have earned to help pay down the mortgage.
“It’s all about flexibility. Most customers want to have a small nest egg, even when they are paying off a mortgage, and prefer to see their transaction accounts separately. With this scheme all these balances can be credited against the mortgage for the calculation of interest,” Mr Brock said.
Not all savings accounts can be used for the offset (PIE Accounts (like Notice Saver) and term deposits are excluded), but other Kiwibank accounts like the Now, Bill blaster, Front Runner, savings accounts and On-line call are able to be used.
“Flexibility is they key. With this scheme you get a very competitive mortgage rate, the opportunity to protect your savings and get all your money working harder for you to reduce the level of your loan for the calculation of interest that you have to pay,” Mr Brock said.
The 5.50% p.a. mortgage rate is a variable rate and is subject to change
For further information: Bruce Thompson, Communications Manager (04) 460 6831