Home Loan Frequently Asked Questions
What is channelling?
The key to an effective loan structure is putting your savings and income into an account that helps reduce the daily interest costs of your mortgage, not a separate unlinked account. We call this channelling!
Why? By channelling all your income and savings against your home loan, you’re making your money work harder for you.
Should I shift all of my banking to NZHL?
Yes – but you can still have accounts open elsewhere, although it works best by moving everything across.
My bank already offers an offset account, how is NZHL different?
Generally, banks offset your money from multiple accounts. Some clients find it difficult to track multiple accounts and figure out how much interest is being charged or offset.
At NZHL, we offer a much simpler mortgage structure which still uses your income and savings to reduce your daily interest costs.
Will I have to pay break fees to shift to NZHL?
That depends on your bank and current loan structure. Break fees (if any) can change on a daily basis.
How does offsetting work?
At NZHL we don’t offer an offset mortgage. The key to an effective loan structure is putting your savings and income into an account that helps reduce your daily interest costs, we call this channelling. Get in touch with one of local consultants to learn more.
What is a home loan pre-approval?
A home loan pre-approval is a conditional approval that we can lend you a certain amount of money, provided the property you purchase meets NZHL’s home loan criteria. It’s a good idea to ask us for a home loan pre-approval before you start house hunting. It will help you determine how much you can borrow and to give you some bargaining power when negotiating a purchase price.
Do I get an Eftpos card to use like I do with my current bank?
Yes, you’ll get an Eftpos card that you can use as normal.
How much deposit do I need?
Saving a deposit is probably the biggest hurdle for most first home buyers. First home buyers need to have saved at least 5% deposit with 20% or more being the optimum. Remember that this can be made up from a KiwiSaver first home withdrawal and some first home buyers may also be eligible for a HomeStart Grant.
What other costs do I need to factor in?
As well as a deposit, you’ll need to be able to cover the following costs:
- Solicitor fees – these can vary depending on how complicated the sale and purchase process is.
- Builder’s report – expect to pay between $700 and $900.
- LIM report – between $200 and $400 although some sellers may provide this information up front to buyers.
- Registered valuation – if your lender requires a valuation to confirm your finance, expect to pay between $500 – $700.
- Moving costs.
Can I withdraw my Kiwisaver?
To be eligible to for the KiwiSaver First Home Withdrawal Scheme you must:
- Be purchasing your first home;
- Have been a member of KiwiSaver for a minimum of three years;
- Have your KiwiSaver account with a KiwiSaver provider that allows saving withdrawals; and
- Intend to live in the property for at least six months
We recommend that you contact your KiwiSaver provider and check their individual policy on withdrawals for first homes. If you are eligible to withdraw money from your KiwiSaver, you may also be eligible for a first home deposit subsidy of up to $20,000.00 from Housing New Zealand – known as a HomeStart Grant.
Why does the size of my deposit matter?
The size of your deposit makes a big difference to the interest rate and the other costs you could potentially pay on your home loan. Generally, for lending where the deposit is less than 20%, the lender will also charge a Low Equity Fee (LEF) or Lenders Mortgage Insurance (LMI). Interest rates may also be higher for loans with a low deposit.
Why should I use NZHL?
NZHL genuinely helps clients achieve financial freedom, faster. In fact we often have clients who pay off their mortgages more than 10 years sooner.
It’s all about the personalised service and continuous coaching, smart home loan structure and tools that put you in control.
Can I use NZHL to buy a second home or investment property?
Absolutely, we do this every day for many of existing clients.
How does DebtNav work?
DebtNav is unique to NZHL and we have designed this to be simple to use and to help understand how your daily decisions impact the time taken to repay your home loan.
Debt Nav is an online site is used by Clients and their Servicing Consultants to manage their ongoing plans. It tracks your income and expenditure based on your plan and graphs, and lets you know how long you will take to repay your home loan based on your plans. By checking Debt Nav regularly, you can quickly see if you are achieving your goals.
What is mortgage refinance?
Refinancing with NZHL creates an entirely new mortgage and an opportunity to restructure in a way that better suits your personal situation.
People refinance for lots of personal reasons, from changing circumstances to life goals and interest rates.
People often refinance with NZHL because they want to get ahead faster and take advantage of the smart home loan structure and personalised support we offer.
When is the right time to refinance your mortgage?
Refinance timing is important and dependent on your personal situation, financial goals and the life cycle of your existing loan.
Your best bet is to talk to your local consultant about how NZHL could best help you personally.
How much equity do I need to refinance?
This depends on the type of loan and the lender. For conventional mortgage loans, many lenders require at least 20% equity. Our NZHL consultants will help you through this entire process.