Want to know what is the best bank for a home loan in New Zealand? This is a great question. Many people are curious to know which of the different banks can be the best for their purchase of a new home. In fact there are so many lenders, such as TSB, ANZ and KiwiBank to name a few.
It is believed there is no one fixed answer to this question. The fact of the matter is that there are different banks or lenders, and each one has its strengths that may to apply to different people. Lending scenarios can be different. Rather than naming any specific banks as ‘the best’, this article will help to answer this question with prompts and some ideas to think about when deciding what is the best bank.
It’s important to check with the bank if they support the level of deposit you intend to buy to. For example, some banks might consider a deposit as low as 5%. Other banks would require a deposit to preferably be as close to 20% as possible. Some banks may have stricter rules if your salary is not paid to that bank.
Requirement to change banks
Some banks don’t overly impose a requirement to change banks if you want to get your home loan through them. This can mean an added convenience of not having to move your banking, eftpos cards, etc. to another bank. We do find however that most banks are fairly similar in what they offer. Most banks these days can offer similar facilities to one another, such as a mobile application, Visa or MasterCard debit, good access to ATM machines, and so forth.
Criteria and Policies
Each bank has different criteria, and rules and regulations on who they lend to and who they don’t. Some banks have stricter criteria, whilst others have more lenient criteria.
Take for example “Joe” who works a lot of overtime. For Joe, working overtime is a given in his type of work. In fact Joe has been working overtime almost every week for the past year! Some banks would consider overtime as part of his income, whereas other banks may not entertain overtime. Some banks may say that if Joe had a larger deposit, overtime could be considered. But if he’s a first home buyer with a deposit as small as $50,000, then overtime cannot be considered.
Most of us do our banking online these days, however from time to time a person may need to call into a branch. Consider whether the bank has got facilities closeby to where you live or work, if it’s important for you to be able to easily go to a bank branch if this was ever necessary.
Policies & experience with the type of property you are buying
Banks are not necessarily the same with all types of properties. For example, some banks are more acquainted than others at lending on apartments or townhouses. Some properties do standalone house constructions very well.
Interest Rates & Cashback
Interest rates can influence how affordable or expensive the home loan is. Some banks are more competitive than others on interest rates, whereas others don’t really do a lot of interest rate discounting and cashback. If you’re interested in getting a lower interest rate, you may need to compare on a website such as www.interest.co.nz but also consider whether that lender does (or does not) provide further discounts beyond the advertised rate.
There are a variety of other fees that lenders can charge that may not be immediately apparent. Examples can be application fees, refix fees, top up fees and other types of fees. These other fees can add up and influence the cost of the home loan.
Some home loans have various perks, such as “FlyBuys” being one example of them. The ability to earn points with this popular rewards scheme can be attractive for some people.
People can often have preferences as to which bank they want to deal with based on customer service. Sometimes customer service of one bank can be pleasant, whereas others may feel that other banks are friendlier.
Home Loan Account Types
Some lenders have more interesting options to tailor make your home loan with different facility / account types. Consider checking these out to see if these different account types, such as floating facilities, fixed rate facilities ,and various variations of them, and options as offset mortgages, can help you. Using these special account types, or a combination of them, can mean that you pay a lower amount of interest, or pay your home loan off sooner. Check what types of home loan facilities the lender allows.