Offset your mortgage — FAQs

  • How does it work?

    With an offset mortgage, you offset the balance of your savings and everyday accounts against your mortgage – and only pay interest on the difference.

    So if your mortgage is $200,000 and you have total savings of $10,000, we’ll only charge you interest on $190,000.

  • Will my repayments change?

    Your repayments will stay the same, but, depending on the balance of your savings, more of your mortgage repayment should go towards paying off your mortgage principal, rather than interest.

  • Do I have to fix my interest rate for a period of time?

    No. An offset mortgage is a variable rate product.

  • Which Kiwibank accounts can I offset against my mortgage?

    You can link all our savings and everyday banking accounts to your offset mortgage:

    You can’t link Term Deposits, KiwiSaver or PIE funds like Notice Saver.

  • What’s an effective interest rate?

    With an offset mortgage, you’re only paying interest on a portion of your mortgage. Your effective interest rate is the rate you’d have if you paid the same amount of interest on your total mortgage balance.

    If you like maths, here’s what that means:
    (Offset mortgage balance - savings balances) / offset mortgage balance x interest rate = effective interest rate

    e.g:
    ($200,000 - $10,000) / $200,000 x 5.5% = 5.23% p.a.

  • What’s the difference between this and a revolving credit loan?

    A revolving credit home loan is a variable interest rate loan that works like a large overdraft. You can put money in at any time to reduce the amount owing, then withdraw as much as you need (up to the loan limit).

    An offset mortgage is a variable interest rate loan which keeps your loan and savings accounts separate, and only calculates interest on the net balance between them. You can’t withdraw funds from the mortgage.

  • How many accounts can I link?

    You can link up to eight accounts.

  • Can I link accounts to more than one Offset Mortgage?

    No. A savings or everyday account can only be linked to one offset mortgage.

  • Will I still be able to use my savings?

    Of course. You can use your savings and everyday accounts as usual. The interest you’ll pay is calculated daily on the balance in these accounts, so the more you have in your accounts day-to-day, the more you’ll save.

  • Can I link accounts from other members of the family?

    Yes, you can include your partner (marriage, civil union or de facto), parents’ or children’s accounts.

  • Will I still earn interest on savings accounts that are offset against my mortgage?

    No, any interest-bearing accounts will not earn interest while they’re linked to an offset mortgage.

  • Can I make lump sum payments?

    Yes. An offset mortgage is a variable rate mortgage, so you can make lump sum payments anytime*.

  • Can I still split my mortgage?

    Yes. You can choose to have part of your mortgage on a fixed interest rate and part of it on offset.

  • What if I want to transfer to a fixed rate mortgage in the future?

    You can do that. Your linked accounts would be de–linked from your mortgage and go back to earning credit interest as usual.

  • What are the fees?

    There’s a $250 application fee and an offset fee of $10 per month.

  • How much will I save?

    Everyone’s situation is different. Try our calculator to find out how much you could save.

  • Will it cost me to switch to you?

    Kiwibank has a completely free refinancing package+ for residential property loans that meet certain criteria. This package could save you up to $1200.

  • How do I transfer my accounts to Kiwibank?

    We can take care of this for you. Once you sign up, just provide us with your old bank account numbers and sign a transfer form. We’ll talk to your old bank and do the rest for you.

  • How do I apply?

    In the same way you’d apply for any other Kiwibank Mortgage. You can either:

    1. Talk to one of our Direct Lenders over the phone
    2. Meet with one our Banking Consultants based in our Kiwibank locations throughout New Zealand
    3. Have one of our Mobile Mortgage Managers come and see you – wherever you are.

    Apply now

Conditions

Offset Mortgage is not available to companies, trusts or sole traders. Offset Mortgage is available on (1) a nominated variable rate table home loan of an individual, or of two individuals (including joint accounts) who are either married, in a civil union, or in a de facto relationship; and (2) up to eight nominated savings and everyday accounts of that individual or those individuals, and/or of the children or parents of that individual or one of those individuals. A customer may have more than one Offset Mortgage.

* When your home loan is repayable over more than three years and you fully repay your loan within three years from the date you first drawdown your loan, there’s a fee of $250. This doesn’t apply if you’re taking up a new loan with Kiwibank, or if your loan is being repaid in full and isn’t being refinanced with another lender.

+ The refinancing package is free if your loan is over $50,000, less than 80% of the market value of the residential properties provided as security, transferred to Kiwibank without changing who owns the properties and secured by no more than two securities, if the refinancing documentation is not signed under a power of attorney and if the refinancing does not form part of a series of same day transactions. If you are using an apartment, townhouse or leasehold property as your security, you will need to obtain (and pay for) a registered valuation. The refinancing package is not available for business banking purposes.