Mortgage Home loans are very simple and straight forward in New Zealand.These are the types of home loans which New Zealand Mortgage Solutions can help you structure. Everyone is individual and personal.
The Different Loan Types Explained:
- Table Mortgage - this is a traditional standard type where you can spread your repayments over the term (10, 20, 25 or 30 years) paying the same amount in repayment, spread over the designated term of the loan subject to interest rate conditions.. It is a standard mortgage. You have the choice of Interest Only or Principal and Interest.
- Fixed Rate This is a guarantee that the interest rate is guaranteed not change over the designated fixed rate term you agree on. You can designate from 6 months to 5 years. At the end of the fixed term you contact New Zealand Mortgage Solutions who can help you (at no cost) to determine to fix your term again.
- Interest Only Mortgage this means that all your repayments for loan are interest only and your loan balance will remain the same . Of course these are less repayments than standard table mortgage.
- Revolving Credit Mortgage (Line of Credit) - This is a very flexible home loan. You can combine your cheque account and savings. You can make all your direct debits, mortgage repayments from this at the same time as depositing your salary and rental income into this account. It is good if you wish to pay off your mortgage at your own pace over and above the normal repayments. In Australia this is called “Line of Credit” or “Flexi”. Many people use this as their day to day account to pay accounts and receive income, but you must control this account.
- Floating - This is a Variable rate and the increases are usually determined by the Reserve Bank. It is a daily rate and can be flexible to change. There are redraw facilities if you pay over the limit repayment on each payment. Whereas Revolving Credit is complete redraw facilities.
- Split Facility - The majority of clients for NZ finance have a portion on either fixed and/or variable plus a portion on Revolving Credit. Revolving Credit gives you access to your account to deposit and withdraw and the fixed rate ensures you where you stand and security financially for that term.
- Reducing Loan - A reducing loan makes you pay principle and interest to enable you to pay off your loan.
- Offset Account - is a transaction account linked to your home loan. You can make deposits or withdraw from it as you would with regular transaction account. The biggest difference is that when you hold money in an offset account over a period of time, you can reduce the amount of interest charged on your home loan.