Applying for a home loan takes serious consideration in New Zealand. There are several different home loans to choose from, each with their own distinct benefits and interest rates. It’s unsurprising that potential homeowners often feel overwhelmed by the number of choices at their fingertips.
This process can be simplified by honing in on the interest rate – a major part of choosing any New Zealand home loan. You have to be sure about the amount you want to pay back as a mortgage, depending on the length of the loan. This can impact your credit score in future.
Don’t mistake a loan with a lower interest rate as a better choice, however.
While you pay back less money to your lender over the life of the loan, your loan should be chosen based on a number of factors. What are your goals – is this home going to be renovated and resold later on? How high is your credit score? Loan terms also differ! Higher interest rates may be accompanied by more favourable terms regarding repayments, and a higher loan to value ratio.
For a one year fixed-rate home loan in NZ, the following banks provide a range of interest rates, depending on the mortgage you’d most prefer:
At a one year fixed-rate
The Heartland Bank
The Heartland Bank offers an extremely competitive one year fixed mortgage package at an interest rate of 6.69%. The lowest floating rate offered by a major bank is around 0.10% more than this. Although, competitors such as Money Compare are offering similar home loans at the moment! Homeowners can repay this loan on a weekly, fortnightly or monthly basis, which offers much more flexibility in the long-term.
Money Compare
As a bank, Money Compare also offers home loans at a fixed rate of 6.69%. This is admittedly rare! These loans are commonly repaid on a monthly basis, which isn’t as flexible, although this may be negotiable.
Kiwi Bank
The Kiwi Bank frequently offers home loans at a fixed rate of 6.99% over a period of 12 months. Repayments can be made weekly, fortnightly or monthly. Their loans are tailored to first time buyers, with a loan to value ratio of 90%. As this ratio represents the percentage of the property’s value that you can borrow, 90% is quite a substantial sum!
It is worth noting that the New Zealand government provides substantial assistance for first home buyers, including through the following: First Home Grants, First Home Loans and Kāinga Whenua Loans. These programmes allow selected banks and lenders to provide loans that otherwise exist outside their lending standards – for example, at a much lower interest rate. Whilst you can contact banks directly to discuss your options, the advisors at Simpler offer a balanced and unbiased perspective on the right loan and mortgage for you.
Before you apply for a home loan, it’s best to seek out professional advice. At Simpler, our namesake couldn’t be more accurate – we greatly simplify your home lending to ensure you get the best deal possible. And, you don’t have to pay us a penny for our expert advice!
Learn more about our advisory services by getting in touch, today.
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