Kiwibank revives mortgage ‘cash back’ war
Kiwibank is offering a 1% ‘‘cash contribution’’ of up to $10,000 to borrowers taking out home loans of more than $300,000.
The offer is similar to that offered by BNZ, although that bank’s ‘‘cash back’’ is only available to those who borrow $400,000 or more and the payment is capped at $20,000.
Mortgage advisers say the cash contributions are a bid to win market share, rather than being related to the costs people face when buying a new home.
Kiwibank is offering up to $10,000, BNZ up to $20,000, and ANZ is offering up to $3000. Westpac and ASB have no advertised cash offers. Neither do smaller banks like Heartland, TSB and HSBC, which compete on price.
Pip Maxwell, Kiwibank senior product manager for home lending, said: ‘‘As living costs continue to rise, it is great to put money back in the pockets of Kiwis who are buying a home or may be using our refinance package to switch over.’’
Why are they really doing it?
‘‘They are doing it now at the 1% level because they are hungry for business,’’ said mortgage adviser
Campbell Hastie. Falling house prices and rising interest rates have seen a sharp decline in people wanting home loans.
Home loan applications were down 25% in July compared with the same month last year, data released last week by Centrix showed.
‘‘It is about getting new business in the door and what better way to do it than with a big, fat, juicy incentive,’’ Hastie said.
Once, buyer incentives were linked to buyer costs, such as banks agreeing to pay borrowers’ legal fees, but fierce competition has seen the amount offered decouple from costs and become a percentage amount.