BNZ offers lowest two-year mortgage
LOW interest rates are giving homeowners their best chance in decades to get ahead – but not enough are taking them, Bank of New Zealand says.
The bank is offering a new ‘‘special’’ two-year rate of 4.39 per cent. Borrowers must have 20 per cent equity in their properties to qualify. That is the cheapest twoyear rate in the market, ahead of ANZ Bank’s 4.65 per cent.
The rate is only slightly higher than the record-low 4.35 per cent one-year loans BNZ began offering last month, also apply.
BNZ director of retail and marketing Craig Herbison said the bank’s research had shown that, despite interest rates being the lowest they had been in a generation, many people were still not motivated to look at their mortgage and make sure they were paying it off as fast as they could.
The bank estimated one in three New Zealanders who now have a mortgage wouldn’t finish paying it off before they turned 65.
‘‘The research found people’s expectations change as they get
for which
conditions older. We’re very optimistic in our younger years but we are forced to shift the goal posts as we get older,’’ Herbison said.
‘‘On average, homeowners under 30 think they will be mortgage-free at 50, but fastforward to homeowners aged 50 to 64 and they’re projected to pay off their home loan at 66.
‘‘Interest rates are at a record low and we are urging New Zealanders to make the most of this.
‘‘Everyone is talking about first home loans; we’re encouraging Kiwis to think about what your last loan looks like.’’
Herbison said there had not been a better chance since the 1960s for homeowners to pay off their loans faster.
‘‘Now is the time for people to take a serious look at how their loan is structured to see how much they can save.’’
BNZ research showed less than 40 per cent of people understood that paying ‘‘as little’’ as an extra $30 a week could knock five years off the term of their loan, based on current rates.
‘‘It’s a competitive market and we want to ensure people are canvassing their options.’’