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  • Applying
  • Conditional approval
  • Understanding your home loan
  • Fixed interest
  • Floating interest
  • Features of our home loans
  • Talk to an expert
>

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02 APPLYING
Applying

02 CONDITIONAL Approval APPROVAL APPROVAL
Conditional approval

02 Understanding your home loan
Understanding your home loan

02 Fixed interest2
Fixed interest

02 Floating interest4
Floating interest

02 Tailored repayments2
Features of our home loans

02 TALK TO AN EXPERT
Talk to an expert

Applying

When you apply for a loan we ask you for lots of information about your financial situation. How much you have for a deposit, and how much you earn are two of the most important parts. But we also ask you to provide a range of details about your outgoings such as the amount you spend on groceries every month, to any credit card debt or loans you have, to the value of anything you might own like a car. 

Once it’s with us, we will check it against our lending criteria, and then work out how much risk we think is involved with the loan. There are a few things you can do to help your application which are listed below.

1. Build a savings history

This isn’t mandatory, but it takes discipline to save regularly. If you have a savings history it shows us you have the commitment you’ll need for a mortgage.  

2. Check your credit rating

If you’ve ever been late on a loan payment, or gone into accidental overdraft, it could appear on your credit history. It’s one of the first places we’ll look, so if you start cleaning up your credit now, such as paying any outstanding bills, then you'll give yourself the best chance of success. You can find out more about your credit history at www.creditfile.co.nz

3. Pay down existing debt

Ideally you wouldn’t already have a lot of debt before borrowing to buy a home. Pay down your loans and credit cards  as much as possible, or better yet, pay them off. Also if you have a zero balance on your credit cards but a high limit, we see this as potential debt you can get into in future. It’s a good idea to cancel any credit cards you don’t need, and maybe reduce the limits on others if they’re higher than you need.  

4. Have a written budget

Again this isn’t something you have to have to get a home loan, but we’re going to ask you for a lot of detail about your current financial situation, so you’ll need to know what’s coming in and what’s going out. There are lots of free online budget planners, such as this one at sorted.org.nz. Download your last three months of bank statements, work out where your money really goes, and build a budget. 

5. Have the right deposit

At BNZ, we usually required a 20% deposit, so you should aim for this if possible as it means you won’t get caught in the Loan-to-Value Ratio(LVR) restrictions. The bigger your deposit the better – because you’ll borrow less meaning lower overall interest over the lifetime of the loan.  

If you’re declined

If your application is declined we'll explain why and show you ways in which you can re-apply and succeed. 

Conditional approval

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Apply now

If you're looking for a home loan, just complete this form.

If your application is successful you’ll receive conditional approval. This helps you work out what you can afford and sets a good ballpark for the amount to borrow. 

When you’re bidding on a home it’s better to focus on your offer, and not what you could afford to pay. 

If your application is successful you’ll receive conditional approval. This helps you work out what you can afford and sets a good ballpark for the amount to borrow. 

When you’re bidding on a home it’s better to focus on your offer, and not what you could afford to pay. 

Understanding your home loan

There are two ways you can set up your home loan, fixed or floating. The difference between these loans is to do with the interest rate (which can affect your repayment amount) and how you can use your savings or income to lower the interest you pay. BNZ also offers a way for you to automatically increase your repayments every year to help save you money, called tailored repayments.

As you read about the types of loans available, it may help to know that you don’t have to choose just one. You can split up your home loan, and have some of it on a Fixed Interest rate and some on a Floating Interest rate. Often when people split their home loan like this, they do it to spread their risk if rates move higher, and also have the option of paying off more using the Floating rate part of the loan. 

You also have other options when you first set up your home loan repayments. You can choose to make your repayments slightly higher than the minimum amount (for example, paying $640, instead of $634) and make your repayments more frequently (for example, fortnightly instead of monthly). Both of these options could also help you pay off your loan faster.

Most repayments include a combination of interest and principal. At first, your repayments comprise mostly of interest, but as the amount you still owe begins to decrease, your regular repayment will include less interest and repay more of the principal (the amount you borrowed).

Link

Housing marketing commentary

Read the latest analysis, opinion and insight on the NZ housing market from BNZ Chief Economist,Tony Alexander.

You also have other options when you first set up your home loan repayments. You can choose to make your repayments slightly higher than the minimum amount (for example, paying $640, instead of $634) and make your repayments more frequently (for example, fortnightly instead of monthly). Both of these options could also help you pay off your loan faster.

Most repayments include a combination of interest and principal. At first, your repayments comprise mostly of interest, but as the amount you still owe begins to decrease, your regular repayment will include less interest and repay more of the principal (the amount you borrowed).

Fixed interest

With a fixed interest rate home loan the interest you pay is fixed for a period of six months to seven years. The most popular terms are one and two years. At the end of the term, you’ll move to a floating rate, unless you choose to fix again.

Pros

Each repayment is the same over the fixed term, so you’ll have confidence knowing it’s within your budget. 

If you think the market interest is going to go up, you can lock in a lower interest rate. You may be able to pay off up to 5% of the loan amount at the start of your fixed term on most fixed products without any Early Repayment Charge.

01 Fixed interest
Pros

Each repayment is the same over the fixed term, so you’ll have confidence knowing it’s within your budget. 

If you think the market interest is going to go up, you can lock in a lower interest rate. You may be able to pay off up to 5% of the loan amount at the start of your fixed term on most fixed products without any Early Repayment Charge.

01 Fixed interest
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Fix with certainty or float with confidence

The certainty of fixed repayments, or the flexibility to move your money around - we have a home loan to suit.

Cons

If you sell your property before the mortgage term is finished, or break a fixed loan in some other way, you’ll be charged a break fee.

Cons

If you sell your property before the mortgage term is finished, or break a fixed loan in some other way, you’ll be charged a break fee.

Floating interest

Floating rate loans are where the interest rate goes up or down. This means your repayments can go up or down, too. [As well as others, the interest rate is also linked to the cost to BNZ of borrowing funds from overseas and the Official Cash Rate (OCR)].

Pros

You’ll have greater flexibility to make changes to your repayments without penalties to help pay off your loan earlier.

Group 20
Pros

You’ll have greater flexibility to make changes to your repayments without penalties to help pay off your loan earlier.

Group 20
Cons

When rates go up, repayments can also go up, which can put pressure on your day to day finances.

Cons

When rates go up, repayments can also go up, which can put pressure on your day to day finances.

Features of our home loans

04 Tailored repayments
Tailored repayments

With tailored repayments, every year (on the date you originally drew down your loan) we’ll give you the option to make a small increase in your repayments. You can choose to accept or decline this increase depending on what you can afford, and you will continue to have the option of increasing your repayments every year until you’ve paid off your home loan. Each small increase you accept year to year could help you pay off your home loan faster.

04 Tailored repayments
Tailored repayments

With tailored repayments, every year (on the date you originally drew down your loan) we’ll give you the option to make a small increase in your repayments. You can choose to accept or decline this increase depending on what you can afford, and you will continue to have the option of increasing your repayments every year until you’ve paid off your home loan. Each small increase you accept year to year could help you pay off your home loan faster.

OFFSET HOME LOAN

An offset home loan looks at the combined balances of your everyday accounts and subtracts these from the total owing on your home loan, reducing the amount of interest you pay. You don’t need to have large sums in your accounts, the interest is calculated daily so even having your wages, money for bills, or savings for a holiday sitting in your accounts, will help to lower the interest you pay.

For example, if you have $7,500 in your everyday accounts and offset this against a $150,000 floating mortgage, you’ll only pay interest on $142,500. Think about how much you could save.

If you’re disciplined, you could pay off your home loan faster. It’s also a great way to manage payments if your income is irregular. By putting your extra money into this account instead of a savings account, and you’ll get bigger interest savings on your loan. BNZ offers an offset home loan called TotalMoney. Find out more about TotalMoney here.

Offset
OFFSET HOME LOAN

An offset home loan looks at the combined balances of your everyday accounts and subtracts these from the total owing on your home loan, reducing the amount of interest you pay. You don’t need to have large sums in your accounts, the interest is calculated daily so even having your wages, money for bills, or savings for a holiday sitting in your accounts, will help to lower the interest you pay.

For example, if you have $7,500 in your everyday accounts and offset this against a $150,000 floating mortgage, you’ll only pay interest on $142,500. Think about how much you could save.

If you’re disciplined, you could pay off your home loan faster. It’s also a great way to manage payments if your income is irregular. By putting your extra money into this account instead of a savings account, and you’ll get bigger interest savings on your loan. BNZ offers an offset home loan called TotalMoney. Find out more about TotalMoney here.

Offset

Talk to an expert

Group 7

BNZ has a team of professionals whose job is to help guide you through the process, and make sure you get the best outcome possible for your situation. You can talk to one of our experts on 0800 275 269 to get personalised advice on your specific needs.

Group 7

BNZ has a team of professionals whose job is to help guide you through the process, and make sure you get the best outcome possible for your situation. You can talk to one of our experts on 0800 275 269 to get personalised advice on your specific needs.

Stay on top of your application

Tick off these steps to help you complete your application.

Your deposit

Home loan application

Finding a home

Buying a home

Settling

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