Kiwibank is resurrecting a cash incentive for mortgage borrowers as it strives to spruik activity in a housing market stuck in the doldrums.
The bank is resuming an offer used earlier in the year of a 1% cash contribution up to $10,000 on new home loans of at least $300,000 for borrowers with at least 20% equity. The loan would need to be $1 million to qualify for $10,000.
Other banks are also offering non-rate incentives to borrowers. Notably BNZ is offering a cash incentive of up to $20,000 for loans worth at least $400,000.
“We last did this offer in June, which proved to be popular with customers, so this cash offer is back to continue helping more Kiwi achieve their home ownership goals. As living costs continue to rise, it’s great to put money back in the pockets of Kiwis who are either buying a home or may be using our refinance package to switch over," says Pip Maxwell, Kiwibank's Senior Product Manager for Home Lending.
Kiwibank's 1% cash contribution offer is available for new Kiwibank home loan applications applied for between September 5 and September 25.
Banks typically strive to spruik housing market activity in spring. Over the weekend Westpac cut its longer term mortgage rates, albeit it increased its shorter term ones at the same time.
Last month Kiwibank CEO Steve Jurkovich told interest.co.nz there may be a pick up in housing market activity in spring, but not at the levels of recent years.
The latest monthly Real Estate Institute of New Zealand figures, for July, show REINZ's House Price Index down 11% from the peak last November, sales volumes down 37% year-on-year to 4,678, the median number of days to sell up 16 to 47, and inventory up 108% year-on-year to 26,358.
36 Comments
New home loan applications to kiwibank (which includes transfers to kiwibank from other banks).
Kiwibank's old "we don;'t pay cash backs because we provide the legal services for the purchase and mortgage" clearly wasn't a big seller. Let the cash back bidding wars begin as the banks fight for customers coming off fixed rates in an ever shrinking market.
I also heard on the radio this morning real estate agents want to be able to charge for their efforts if a house they are advertising has not sold after 6 months (or some period). Hear it in passing and cannot find a link but is a sign there is competition on new and rollover lending as sales nosedive.
In real estate, everything is negotiable. No one should ever re-fix with their own bank without asking for something. Just make a couple calls to other banks inquiring about switching, see what you can get, and ask your bank to match it. I did this when I had a mortgage and it worked every single time. Minimum $2k, up to around $5k. Of course, you have to be prepared to switch, which I did once or twice. But usually there's no need.
Just borrow to build motels and rent the rooms to the government for emergency housing. In your terms & conditions have the government cover damages and refurbishment. Or just sell the finished development directly to the government for twice the price - the best carry trade ever lol :) !!
Why build houses which may struggle to sell when there is a housing list of tens-of-thousands and a government willing to pay moteliers high prices for rooms.
$10,000 is paltry. Depending on the area you can probably build a lot of motel units for the cost of a house and land package. Because custom would be derived through the government, just buy the cheapest land, in the cheapest metro area.
Why build townhouses and units when you can get the same return or more form building a room?
Property investors told to repay debts. Some landlords are being asked by their banks to take action, including potentially selling properties, to pay down their debts due to rising interest rates. What people don’t realise is that they need to advise the bank they have sold and what their preference is for debt repayment. If someone sells their rental for say $1 million, but only owe $500,000 on it, and have other debt of say $600,000, if they don’t do an application the bank will take the full $1m sale proceeds and repay what’s outstanding.
https://www.stuff.co.nz/business/money/300679492/property-investors-tol…
I have switched banks in the past to get cash incentives and a slightly better rate on each move. Apart from negotiating better rates have banks ever offered cash incentives to stay? Or do I have to keep moving to a new bank every 3-4 years to pick up a new incentive.
I did wonder that myself. I moved for a cash incentive and better rate about 3 years ago. My bank at the time, who I'd been with since I was a school kid in the late '80s, were relying on some combination of imagined customer loyalty and laziness on my part to keep my business.
I'm not averse to making veiled (or even overt) threats to my bank about keeping my business. They're not doing me a favour by lending to me, I'm doing them a favour by choosing them as a source of funds. I hold accounts with several banks so moving lending between them is fairly simple, since there is already a relationship. I'm the customer dammit, serve me.
(Side note: On a 3.19% rate with ASB til May 2026. Unlikely to be throwing chairs for a while.)
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