Why use the team at NZ Advice Group for your Home Loan?
If you’re looking to purchase a new home or would like to know what options you have for your next move then we can help make the process a lot easier and ensure you get the best Options, Advice, Service and Price as detailed below.
Best of all is that our service is Free to you, we are paid by the banks to give advice on their products.
Fixed interest rate loans
With a fixed rate the interest rate you pay is fixed for a period of six months to five years. At the end of the term we will carry out a review with you and you can choose to re-fix again for a new term or restructure your lending to fit your current circumstances.
- You know exactly how much each repayment will be over the fixed term
- Lenders often compete with fixed rate specials.
- Fixed rates often have limits on how much you can change repayments or lump sum repayments.
- During your fixed term, rates may drop below your fixed rate.
- If you sell your property or break your fixed loan you may be charged a fee.
Floating rate (or variable rate)
Every lender has a floating rate which changes as market factors change. This may be due to increases or decreases in the Official Cash Rate or other market factors.
- You have greater flexibility to make changes without penalty, such as paying off the loan or adjusting payments to fit your budget.
- Floating interest rates can change overnight and your cost of borrowing could increase.
Revolving credit loan
Revolving credit loans work like a large overdraft. You only pay interest on the amount you have borrowed, not the limit. This allows you to actively reduce your lending by making regular lump sum payments.
You can make lump sum repayments and re-draw money up to your limit. Some revolving credit mortgages gradually reduce the credit limit to help you pay off the mortgage.
- If you’re well organised, you can pay off your mortgage faster. This also suits people with uneven income as you can pay more as you earn more.
- Putting surplus funds into this account rather than a separate savings account will give bigger interest savings and also avoids the tax on the savings account interest.
- You need discipline. It can be tempting to always spend up to your credit limit and stay in debt longer.
- There is generally a fee for having a revolving credit account of around $10 per month.