Bank of New Zealand Turns Up The Winter Heat In Home Loans Market
Put the heat on your bank to do a better deal on your home loan. That’s the message from Bank of New Zealand which has introduced an easy way to find out whether you are getting the best deal possible compared to Bank of New Zealand’s Tailored Home Loan.
Bank of New Zealand’s new website – http://www.takethetest.co.nz – invites you to plug in the advertised variable rate or standard fixed rate term that another major bank is offering and find out whether Bank of New Zealand’s Tailored Home Loan could save you money over the term of the loan.
“Most likely we can show you how to save money on your home loan,” says Bank of New Zealand general manager of personal financial services, Blair Vernon. “Our Tailored Home Loan is designed to pay off your loan quickly and so save you money.
“Lots of people think banks want you to take ages to pay off you home loan so we make more money out of it. Wrong.
“If you pay off your home loan faster it means you have more money to use for other things once your loan is paid off, and that might include buying another property using a home loan, or investing through your bank. So, we definitely aren’t interested in keeping you tied to your home loan for as long as possible. Our aim is to help you pay off your loan so you can get on and do something else with your cash.”
‘Take The Test’ compares a Tailored Home Loan over a 25-year period to standard loans offered by major banks at current rates, excluding promotions or any other discretionary offers. The Tailored Home Loan is structured so that customers make increased repayments over the term of the loan, thus decreasing the term, saving money in interest over the life of the loan. Customers taking a Tailored Home Loan will need to adhere to the incremental annual repayment increases in order to save money.
The ‘Take The Test’ campaign is aimed mostly at people who already have a home loan and are considering refinancing with another bank. In the banking business, these people are known as ‘switchers’.
The focus on switchers follows Bank of New Zealand’s highly successful marketing strategy earlier this year, in which Bank of New Zealand set the trend for fixed rates by offering highly-competitive two-year fixed rates.
“By the way, the lowest interest rate doesn’t necessarily add up to the best home loan over the long term,” says Mr Vernon. “There can be a difference of 150 basis points (1.5%) between two loans, and the higher one can be cheaper over the life of the loan depending on things like the frequency of the repayments and the type of home loan product. That’s why it’s worth taking the test, regardless of what interest rate you are paying.”
Mr Vernon says the ‘Take the Test’ website provides an easy, systematic way to compare Bank of New Zealand’s Tailored Home Loan to other major banks’ standard home loans. “A mortgage broker can’t show you these options because Bank of New Zealand only sells its home loans directly to its customers”, says Mr Vernon.
As well as the ‘Take The Test’ website, Bank of New Zealand has skilled-up its staff to help them to help customers to switch banks if they are moving to Bank of New Zealand as part of a home loan deal.
Mr Vernon says: “We know that one of the reasons people won’t switch their home loan between banks is because of the inconvenience of changing banks – rearranging your automatic payments, telling your employer, all that sort of thing. It’s hard work. Who wants it?”
So, Bank of New Zealand is introducing a ‘switcher’s package’, which includes easy-to-complete letter templates and a checklist of exactly what you need to do to make the switch. So, that means you won’t have to go back to the bank again because you didn’t get that crucial number they need.
There will also be rebated set-up fees for people who are establishing new APs with Bank of New Zealand as a result of a home loan switch. There is also a new Bank of New Zealand 0800 number – 0800 BNZ Loan – which is dedicated to home loan customers.
“This winter we’ll be making it easier than ever to swap to a bank that offers a great home loan deal,” says Mr Vernon.
“Home-buying falls off during winter. It’s
cold and messing around with your home loan or buying a
house is the last thing you want to do. The deals we are
offering will make it hard for home-buyers, and people who
are looking at switching banks, to make excuses for not