kiwibank offset mortgage change
| # | Post |
|---|---|
| 1 | i see kiwi bank are changing their offset mortgage accounts. doesn't that make it completely pointless? the whole point of offset is you give up interest on the savings, so you can have savings without a penalty on your mortgage. if your going to get penalized for having savings then you might as well have normal mortgage and throw everything you have into the mortgage. tweake - 2021-07-26 17:32:00 |
| 2 | Must be costing them money, you know how bankers hate that! jeffqv - 2021-07-26 18:13:00 |
| 3 | where did you see that? not that I don't believe you, but you'd kind of hope if you had that product the bank might have made you aware of changes... jamesnmatt - 2021-07-26 18:33:00 |
| 4 | jamesnmatt wrote: tweake - 2021-07-26 19:14:00 |
| 5 | oh will keep an eye in the post then, how annoying - we changed our structure to better utilise the money we had saved as the interest paid out on it was so dismal jamesnmatt - 2021-07-26 19:24:00 |
| 6 | hmm that's interesting - we just set this up with kiwibank a couple of months ago so it will be really annoying if they change it already. supersapper - 2021-07-26 20:55:00 |
| 7 | I never quite understood the point of an offset mortgage. We just pay into the mortgage as much as possible and have a revolving credit facility for emergencies. Always seemed more simple to us. matt5209 - 2021-07-26 20:55:00 |
| 8 | matt5209 wrote:
we've carved a loan up - fixed a large part, and floated a smaller lot that is equal to the money we have saved. We make the maximum payments allowed on the fixed rate (including the 5% extra pa) but we pay interest on that. We pay 4 times what is required on the floating rate but because it's offset to our savings it is interest free. This means we can slash that down over the time the other bit is fixed, then move more across, rinse and repeat. I've worked out we can be mortgage free in about 8 years this way (after borrowing a lot 4 years ago to build) With a revolving line I personally dont think we'd get as much benefit. We can still spend from our savings if we want, we just make sure to never go below the value of that loan. That said if they are tinkering with it, it may not for long! Edited by jamesnmatt at 9:09 pm, Mon 26 Jul jamesnmatt - 2021-07-26 21:08:00 |
| 9 | matt5209 wrote: for me offset has all the income going to the mortgage, but unlike revolving credit, you have to save money before you can spend it. tweake - 2021-07-26 21:48:00 |
| 10 | I think this change is pretty BS to be honest. I guess they're looking to stop offering Offset mortgages, and they contractually can't do that so are just going to make them so expensive/pointless that everyone migrates off them by choice. We have one at the moment with them but if they make this change we'll pull all our banking from them and move elsewhere. Not putting up with that kinda treatment. Edited by esprit at 1:55 pm, Tue 27 Jul esprit - 2021-07-27 13:45:00 |
| 11 | matt5209 wrote:
We have it set up so that we offset our mortgage against a relative's account in lieu of them having a term deposit. Because term deposit rates are so abysmal, we've agreed an interest rate halfway between what they would get on term deposit and what we'd get on 1 year fixed. Basically means we pay less interest, but they get more interest than either of us would otherwise, and it keeps the interest money in the family rather than going to the bank. It also gives our relative all the benefit and low risk of a term deposit, while also having the flexibility to draw money out of that account at a minute's notice without penalty. Any change to this would make this system completely pointless for us and we'd just shift to another bank with a fixed rate (or another one that offers offset mortgages). esprit - 2021-07-27 14:05:00 |
| 12 | well didn't get the letter today either - has anyone got one handy that can give a brief rundown of the changes? jamesnmatt - 2021-07-27 19:56:00 |
| 13 | jamesnmatt wrote:
there is 3 changes to the terms and conditions. electronic consent. so they can send updates via email offset ratio. adding an offset ratio to offset accounts. payments and top ups. added info on how you can make payments, top up or change regular payments. they come into effect 25 august. tweake - 2021-07-27 21:10:00 |
| 14 | They haven't said anything about how the offset ratios will be applied. Says they're currently 1 but no clue if or when they will change and why. esprit - 2021-07-27 22:20:00 |
| 15 | Thanks guys :) jamesnmatt - 2021-07-28 09:42:00 |
