New Zealand Home Loans Ltd, based in Hamilton, is now totally owned by Kiwi Group Holdings Limited, the parent company of Kiwibank. Kiwi Group Holdings bought a 51 per cent shareholding in New Zealand Home Loans in 2006 and has progressively increased its shareholding since then. It has now completed the purchase of the remaining 24 per cent of the shares.
New Zealand Home Loans has a nationwide network of 59 franchises and 190 consultants and accounts for 30 per cent of Kiwibank’s mortgage business. This year the company will write more than $950 million and is expected to make the billion mark in the next financial year.
Neil Richardson, chair of NZHL, said the company will continue to operate as a separate entity and there will be no change to the franchise’s successful business model.
“Kiwibank and New Zealand Home Loans will operate as separate but complementary businesses. Both businesses were founded with the vision of putting New Zealanders into a stronger financial position. It was important for us to remain in 100 per cent New Zealand ownership and keep millions of dollars of mortgage funding in the New Zealand economy, so we’re delighted with this move.
“The buyout further augments the security and stability of New Zealand Home Loans financial position, providing a solid base for its goals to double its turnover by 2017,” Mr Richardson said.
New Zealand Home Loans will continue to operate under its existing management structure from its Hamilton headquarters, with Mr Richardson remaining as chair and Mark Collins as CEO.
New Zealand Home Loans was set up in 1996 by John Erkkila and Murray Ferguson.
How New Zealand Home Loans works:
- New Zealand Home Loans helps its clients simplify their finances by operating them from one bank account, which consolidates and reduces interest costs and makes money management easier to track. All income and expenditure – including mortgage repayments – is channelled through this transactional account. The mortgage is arranged on a reducing principal and interest basis. There are no day-to-day transaction fees, and clients receive an EFTPOS/ATM card and have access to online banking and telephone banking.
- Interest payable is calculated daily on the net total household debt. This solves the problem of savings accounts earning a lower interest rate for households than that they’re paying to service debt, and the problem of a household’s salaries going straight into a transactional account that earns them no interest. Under the New Zealand Home Loan structure, savings and salaries have the effect of earning the household the same amount of interest as that they’re paying for the mortgage.
- Unlike a traditional revolving credit mortgage, the householder is not able to draw down the portion of the mortgage that has been paid off.
- New Zealand Home Loan clients receive one-on-one advice and support from a consultant during the process of setting up the mortgage, followed by on-going support and reviews throughout their relationship, to ensure they stay on track to meet their day-to-day commitments and their wider, longer term financial goals.
- A simple-to-use and easy to understand software package, called debtnav, helps clients manage their day-to-day finances and track their progress towards their goals.
- New Zealand Home Loans can arrange comprehensive insurance to give homeowners a safety net to protect their finances and their families, including income-protection, life, and home and contents.
For further information please contact: Julienne Gibbs 07 834 6524 or 0275 21 6475