Being ''mortgage-savvy'' can save you thousands on your
repayments, Canstar general manager Derek Bonnar says.
Releasing the latest annual home loan star ratings, Mr Bonnar
said buying a home was one of the most exciting, emotive and
expensive activities people were likely to undertake. He
predicted that by following a few tips, ''typical''
homeowners could save more than $100,000 over the life of
''The New Zealand property market is booming right now, which
creates a sense of urgency for some buyers. In their
enthusiasm to get into the market, they sometimes don't stop
to consider how to best structure their mortgage.
''Being mortgage-savvy is so important because it's the
biggest debt that most people are ever likely to have and it
can cost hundreds of thousands in interest payments over the
years,'' he said.
For many mortgage holders, their typical $300,000 loan could
cost them nearly $635,000 by the time they paid it off. That
was assuming the current low interest rates remained. If
rates rose by 2%, the same mortgage would cost nearly
Mr Bonnar said home buyers and owners should negotiate a
lower interest rate. Financial institutions wanted business
and some would reduce their rate to attract and retain
customers. Negotiating a lower interest rate and maintaining
monthly payments at the previous level could save homeowners
even more. A 0.25% reduction on standard rates, plus keeping
repayments the same, could save a total of $41,400 in
Increasing regular payments could also make a difference.
''While it's more fun to spend them on something else,
occasional ad hoc payments can make a significant difference
to your mortgage as well. A tax refund, for example, or a
work bonus made as an extra payment helps.''
Across the seven loan categories assessed, several mortgage
providers stood out as offering ''five-star'' value, Mr
Those included Kiwibank, achieving a five-star rating in six
of the loan categories, followed by Westpac with a five-star
rating in five categories. BNZ achieved five-star rating in
the standard home loan and investment home loan categories
and ANZ was five-star rated in the line of credit,
residential long-term and investment long-term categories.