Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Wizard Disappointed With Guarantee Tactic

Press Release
Wizard Disappointed With Guarantee Tactic

Wizard Home Loans today condemned Kiwibank’s so-called guarantee as a dreadful means of attempting to lure business

Wizard New Zealand head, John Grant said, “The offer by Government backed Kiwibank provides a so-called guarantee of having the lowest rates and will refund the difference if the borrower can show that an alternative would have been cheaper. However it comes with so many conditions that it is unlikely to see many claims paid.

“Firstly, there are more than 60 lenders operating in the NZ market but the guarantee only applies to the five trading banks. These banks are traditionally the highest cost lenders. The “guarantee” excludes specialist lenders like Wizard who consistently offer a more competitive home loan offer than banks.

“Secondly a borrower needs to have a mortgage running for at least six years before the guarantee is effective. But everyone in the lending industry knows that the average life of a mortgage is four point six years.
This time limit makes a mockery of the Kiwibank “guarantee”.

Mr Grant says it gets more complicated from there, “Thirdly it includes an ‘apples for apples’ clause. This means that at the end of six years a comparison of equivalent products needs to be done showing an exact match of the Kiwibank loan..

“For example it is common to fix part of a loan and float the balance. If the period of fixing is two years and then floats for two years and is fixed for the final two years, you can imagine how difficult it would be, for the average person, to do the comparison calculations.
“Kiwibank says this can to be done by the borrower, an independent third party or the bank. This would be very complicated for the average borrower, leaving them with the choice of paying an independent person to do the calculations or having to rely on Kiwibank to do it for them. “

Mr Grant says there is a definite need for home loan lenders to become more open with borrowers. “Wizard Home Loans has been a major campaigner for increased transparency and disclosure in home loan advertising. In Australia, legislation has recently been passed introducing fines of up to $500,000 if the “true interest rate” is not used in all home loan advertising. “Wizard led the industry charge to have this legislation introduced and is the only lender to use the true rate.

Wizard Home Loans has been operating for over six years and now has more than 140 branches in Australia and New Zealand and is settling over $450m in new loans per month. In New Zealand Wizard has 11 branches and will soon open a further three in the Wellington region.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>


Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news