If you're an existing Kiwibank Home Loan customer and need temporary relief from your home loan commitments we have several options available depending on your circumstances. One of our specialists will work with you to determine what the best option is for your situation and talk you through the application process.
Here are some options that might be suitable for you:
Reducing to minimum payments
You may be able to reduce your mortgage payments to the minimum required if your repayments are set higher than the minimum required currently.
Extension of home loan term
You may be able to extend your home loan term, which will reduce your regular home loan repayments. You'll end up paying your home loan over a longer term which will increase your overall cost of borrowing however you'll still be paying off principal on your loan. Depending on your circumstances, this may be more preferable to other options such as an interest-only loan or home loan repayment deferral where you're not paying your home loan. Once things are back to normal, you can reach out to us again and we can reduce the loan term back to what it originally was although this will mean that your repayment amounts will increase.
Interest-only home loan payments
If you need to reduce your home loan repayments further, then an interest-only loan could be the right option for you. During this time, your home loan balance will remain the same as you'll just be paying the interest on your home loan. Although your short-term financial obligations reduce, the lifetime cost of borrowing will increase as a result of you delaying the repayment of your principal.
An interest-only loan is available for a period of up to six months. At the end of your interest-only period, your home loan repayments are increased so that you still repay your home loan over the original term, or a term extension is arranged to keep your repayments the same as what they were prior to the interest-only term.
Home loan repayment deferral (previously known as a repayment holiday)
Applying for a home loan repayment deferral is another option. This offers short-term relief to customers who can’t afford to make repayments onto their home loan. It stops repayments onto your home loan and may be approved for up to six months.
How it works
Although your short-term financial obligations will reduce, the lifetime cost of borrowing (i.e. the interest charged) will likely increase. This is because:
- You’re delaying the repayment of your principal; and
- Interest will continue to be charged during the period of your repayment deferral. Any interest accrued during this period will then be added to your loan balance.
At the end of your repayment deferral, your repayments will usually be adjusted so that you still pay your home loan off over the original loan term, or a term extension is arranged to keep your repayments the same as what they were prior to the repayment deferral.
To apply for any of these home loan relief options, please fill out our personal support form.