Referring to the new construction fee as an “incredible game changer,” Wayne Henry, managing director of mortgages Wayne Henry, said that the floating rates currently offered by major banks start at 3.40 percent, borrowers can potentially save thousands of interest.
“It will certainly allow [borrowers] to pay off the home loan faster, “said Henry.
For borrowers who prefer the certainty of a fixed interest rate, putting all mortgages at a floating rate may not be the best option. Some may choose to split the loan, putting some at a floating rate and others at a fixed rate, an option that Henry encourages borrowers to obtain advice on.
“With such a low rate, you should be able to structure your loan wisely to take advantage of such an offer … if you blocked all your loans for a fixed term, you could lose,” Henry added.
Those who are building a home that supports ‘going green’ can also take advantage of a $ 2,000 refund offer. The new buildings must incorporate sustainability features and have a HomeStar rating of at least six, offered by ASB Bank in partnership with the New Zealand Green Building Council.
Available through ASB Bank as of Monday, the variable back home loan rate ‘Back My Build’, currently 1.79 percent, can be obtained for up to three years from the date the loan is withdrawn.
Under a floating (variable) rate, customers can make extra payments without penalty and the interest rate can go up or down. The ASB said customers who choose the new rate can switch to a fixed interest rate at any time.