Kiwibank new terms and conditions. Not good news for those with offset mortgages.

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Forums › Finance and wealth management › Kiwibank new terms and conditions. Not good news for those with offset mortgages.

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Handle9

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#2756918 8-Aug-2021 22:14

eracode:

@David321

Certainly understandable being upset at potentially losing something you’ve been able to take advantage of. However here’s nothing to the banks’ advantage in providing these offsets and it’s not really surprising that they are changing or withdrawing them. They will make more money as a result and never underestimate banks’ thirst for profits.

Although they will upset some of their customers for a while, I’m not sure it’s a biggie enough to push those customers to change banks - and if anyone does change, how do they know their new bank won’t make a similar change soon?

If they do change to a 50% offset, that’s better than no offset.

I'd be changing banks if this was important to me - it has the ability to save a ton of money.

mudguard

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#2756942 9-Aug-2021 07:50

Wheelbarrow01:

mudguard:

If you had $100K in savings why not have a portion of your mortgage on floating for the same amount and dump that money into?

I've been inquiring about offset mortgages, BNZ mainly, but they charge a $10 monthly fee which offsets the amount I'd save down to $4 per month. So a bit pointless really.

Interesting - I have a home loan with BNZ. Part of the loan is fixed which I obviously pay interest on. The other part is floating but is (at the time of writing) fully offset against savings. I have never been charged any fees for this arrangement. Apart from interest (when applicable), I don't pay any fees with BNZ at all, and haven't since I moved to them in 2014.

Yeah it's $10 per month, but again, not everyone gets charged everything. Might be worth digging around to see if it's coming out or not. In my case (not a home owner yet) I was working out what to do with potential left over savings as I get paid a car salary that will build up for two years. So in my case, the offset amount gets diminished by the $10 fee vs just fixing the amount and leaving the money in a normal account.

alasta

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#2756950 9-Aug-2021 08:26

I am getting charged the $10 a month but it's peanuts compared with the $150 a month that I'm saving from not having to pay any interest on the $40k I have on a floating rate. I hope Kiwibank's changes don't become an industry trend.

snowfly

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#2756957 9-Aug-2021 08:34

As mentioned by others, if you're worried about Kiwibank, just change banks, to either BNZ or Westpac, who both offer offset mortgages.

We've been using BNZ TotalMoney for 10+ years, and found it really useful. Especially as we run our own business / contracting, so when there are a good few months of high income, this cash can sit in the accounts and offset.

According to the BNZ app we've saved $70k interest by offsetting! (we have more than 1 property, and split mortgages between floating/fixed)

We are changed the $10 monthly account group fee, running 12 accounts (up to 50 allowed).

eracode

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#2756959 9-Aug-2021 08:40

eracode:

Certainly understandable being upset at potentially losing something you’ve been able to take advantage of. However here’s nothing to the banks’ advantage in providing these offsets and it’s not really surprising that they are changing or withdrawing them. They will make more money as a result and never underestimate banks’ thirst for profits.

Although they will upset some of their customers for a while, I’m not sure it’s a biggie enough to push those customers to change banks - and if anyone does change, how do they know their new bank won’t make a similar change soon?

If they do change to a 50% offset, that’s better than no offset.

Sorry - I take this comment back. There's clearly people saving good money by offsetting significant amounts.

Sometimes I just sit and think. Other times I just sit.

eracode

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#2757186 9-Aug-2021 14:25

eracode:

Sorry - I take this comment back. There's clearly people saving good money by offsetting significant amounts.

… which the banks will see as profit foregone. So there’s an incentive for them to scrap the offsets. The disincentive is the reaction they will get from affected customers.

Sometimes I just sit and think. Other times I just sit.

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Dratsab

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#2759356 12-Aug-2021 21:11

eracode: So there’s an incentive for them to scrap the offsets. The disincentive is the reaction they will get from affected customers.

Which is probably not a lot of customers anyway as banks don't push people towards this style of mortgage. When I found out about this type of mortgage, about 6 years ago, I switched away from Westpac - best thing I ever did. They were eager to keep me and said they could transfer me to an offset mortgage, I told them they should have made me aware of this option in the first place and that I found their behaviour somewhat deceitful.

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