The battle for home loan business just got more intense as mortgage market volumes slow.
Kiwibank is now offering customers one percent of their new home loan as a cash contribution, up to $10,000. The loan would need to be $1 million to qualify for $10,000.
This is a significant escalation in the cash-back incentive, which up until now had rarely maxed out over $5,000. And a 0.7% incentive rate has been more common.
Kiwibank's targets include first home buyers but their real target are switchers from the other main banks.
The cash contribution offer is available for new Kiwibank home loan applications applied for from June 7, to June 28, 2022 and is conditional on meeting certain conditions.
More information and terms and conditions on the offer can be found here on Kiwibank’s website.
To be eligible, loans must be drawn down by July 29, 2022 and the loan must be for at least $300,000. A minimum 20% equity is required and the borrowers regular income must be credited to a Kiwibank account. Loans for business purposes are excluded.
Strict clawback rules also apply. Within the first year, Kiwibank can claim back 100% of the cash contribution if you pay off the loan. Within the second year, they can claim back 75%; in the third year the claim back is 50%; and in the fourth year, they can claim back 25% of the contribution they paid the borrower.
Kiwibank has also launched two new interactive digital home loan tools, a first home buyer calculator and a repayments and structuring calculator.
63 Comments
This $10,000 offer of "free money" really shouts loudly how it costs the bank zero to produce this, and the $1,000,000 digital mortgage - written into existence with a keystroke. However, the borrower signs over their time, energy, and income to the bank!
When market prices go south, that $10,000 will vanish in a morning, along with a decent amount of hard saved deposit!
Not sure why you've compared purchasing a house to spending all your money at a casino. A house for many is just somewhere to live, to put roots down and have a family. Holding cash and not being able to comit to anything given perceived risk is something that you could definitely regret in hindsight...
I dunno, I figured a skilled professional would be good for a couple hundy. Maybe a bit more for good spelling and grammar.
Then again, I don't know what "skilled professional" entails, sounded like some baller level that'd put a lowly manual labourer to shame.
If you're not prepared for losses then it's probably best you don't play.
200k minus tax is about 133k.
At 7% that's 70k burned in interest charges leaving 63k for principal repayments, rates, insurance and any other living costs.
It's looks like a very thrifty life for the skilled professional for the sake of owning a dump in Glenfield.
This is true, if you're not prepared for large losses it's wise step back at the moment.
Don't skilled professionals got mates or partners? Otherwise maybe they should have a smaller house and lower mortgage.
I'm not sure which is the better long term strategy, thrifty living or carefree exuberance.
If you're not prepared for large losses and think you have to liquidate at a moment's notice, never is a good time.
We dont necessarily need to own anything, end of the day we just need to "use" a house. Like a boat, I don't mind using one from time to time, but stuff owning one. Mooring, maintenance, fuel, etc. Bugger that.
I never really understood these "incentives". $10k in the hand seems like nothing when you're $1m in the hole, plus there are all kinds of strings attached anyway. What kind of person would be attracted to this? Surely you'd save more than $10k by choosing the bank with the lowest fees and best rates, rather than wasting your time with gimmicks.
the idea is you jump banks every 3 years to keep reaping the cashback. Obviously not worth it if the bank is not also matching competitors rates, and i guess there are a lot of people who just think - oh wow $5k, i can buy a new TV, and never do the math on the rate. These people should use a broker who does the math for you.
Standard condition. We traded up in December, had a temporary floating facility as part of our loan of 20% to bridge the sale as we settled on our purchase before our buyers settlement date (less than a month).
I queried with ANZ whether a portion of their rebate would need to be paid back after paying down and discharging the floating portion, they said nope.
Yes just a Margin discount and received similar when looked into a new purchase this time last year…weather a million dollar mortgage is a worry is an…all depends…circumstance are a lot more wider in scope than those posting above..being so definitive is simply not perceiving what also can be purchased and circumstances…
Keep borrowing they say ...cheap money they say
https://www.nzherald.co.nz/business/first-home-buyers-face-potential-10…
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