Category: News

Covid-19 Home Loan Assistance

How the banks can help

covid-19 bank assistance

Here’s how the banks are helping those financially effected by loss of income during the Covid-19 pandemic

Talk to your mortgage adviser before you get in touch with your bank to get better clarity and to better prepare yourself. Think about your cash flow budget for the months ahead and consider your options well. We are here to help and every individual has unique circumstances. It’s always good to talk through your needs and the options first.

Please note (as at 31/03/2020):

  • At this stage Eightfold as mortgage advisers can assist with applications on behalf of ANZ, BNZ and Westpac clients, with the other banks asking clients to go direct as detailed below. We are still here to talk to anyone, anytime regardless of bank.
  • ANZ has now finalised its 6 month payment deferral program, and you can apply for this via your Eightfold adviser.
  • ANZ is working on a simplified process for clients going on to interest only and will provide more detail soon.  
  • Westpac now has a simplified process for clients going on to interest only.  

The Options

Eightfold published a blog on 23rd March which we have updated post the Government announcements around bank assistance. Read blog here.

We’ve cover the high-level communications from the banks below around Home Loans but you’ll also find help around personal and business loans on these pages.

ANZ will soon be able to offer home loan repayment deferrals, which will allow you to pause your repayments for up to 6 months (sometimes known as “mortgage repayment holidays”). 

Home loan repayment deferrals aren’t available just yet, but will be early next week. 

Click on the link below to see ANZ’s full information on home loan hardship and to book a call back from ANZ once they are ready to go. https://www.anz.co.nz/here-to-help/banking-updates/

ASB has assistance ready to go now. You can apply directly online under the two categories set out below.

If your income has been impacted by COVID-19:

  • Interest only repayments on home loans for up to 6 months
  • Mortgage repayment deferral for up to 6 months (interest will still be added to the loan, meaning your loan balance will increase)
  • Interest only and repayment deferral options for personal loan customers

If you have been impacted by any other COVID-19 related reason:

  • Interest only repayments on home loans for up to 3 months
  • Mortgage repayment deferral for up to 3 months (interest will still be added to the loan, meaning your loan balance will increase)
  • Interest only and repayment deferral options for personal loan customers

Click on the following link for full information about applying for support: https://www.asb.co.nz/page/covid-19.html#how-we-can-help-you

At BNZ you could be eligible for a home loan repayment deferral for up to six months, or ‘interest only’ payments for up to 12 months, if your income has been affected by COVID-19.

You can apply directly online through their application link. https://www.bnz.co.nz/contact/covid-19-update/covid19-home-loan-repayment-deferral

Click on the following link for full information about applying for support: https://www.bnz.co.nz/contact/covid-19-update#hl

Co-operative Bank as offering the following hardship services for those effected by Covid-19:

  • Defer your Home Loan repayments for up to six months with a repayment holiday.
  • Consider paying interest only on your Home Loan if your income is reduced.
  • Adjust your Home Loan or Personal Loan repayments down to the minimum amount.

Click on the following link for full information about applying for support: https://www.co-operativebank.co.nz/help/covid-19

If you’re an existing Kiwibank Home Loan customer and need relief from your home loan commitments they have several options available depending on your circumstances.

  1. Extension of home loan term – This temporary extension can be reduced back once income returns to normal
  2. Interest Only home loan payments – For a period up to six months
  3. Home loan repayment deferral – Full principle and interest deferral for up to six months.

Click on the following link for full information about applying for support: https://www.kiwibank.co.nz/contact-us/support-hub/coronavirus-updates/updates-products-and-services/#home-loans

In response to the Government’s announcement, TSB will be offering support to customers by: 

  • Offering ‘Interest Only’ payments for up to six months 
  • Offering a ‘Mortgage Payment Deferral’ for up to six months 

Click on the following link for full information about applying for support: https://www.tsb.co.nz/help/covid-19/mortgage-repayment-deferral

Deferred mortgage repayments are available for six months, as agreed by the Government and banks. This deferral includes principal and interest repayments and is sometimes known as a mortgage holiday. Any interest accrued during the deferral period will be added to your loan.

Requests a six month mortgage and personal loan repayment deferrals. You have several options:

  • If you have a mortgage advisor (broker) please contact them directly and they will be able to assist you. 
  • Alternatively, please call 0800 606 606 to speak to our contact centre.  We are experiencing high call volumes, so please call us next week if your repayment is not due in the next 5 days.
  • We are also working on an online application form that customers will be able to fill out themselves to apply for a deferral. This should be available in the near future. Please check back here regularly if you would like to use this form.

Request Interest Only:

We expect to have a similar simplified process available in the next few days and we will provide you with these details as soon as possible.

Click on the following link for full information about applying for support: https://www.westpac.co.nz/who-we-are/covid-19/financial-support/

Covid-19, Financial hardship and how to survive

Envato, Covid, Corona Virus, Corona

Financial Hardship – Home Loan Options (Updated 29th March)
 
With the Covid-19 Pandemic, many people are experiencing difficult times and uncertainty. This can include concerns around job security and accordingly the ability to continue to meet your home loan repayments during this time.
 
The following is meant as a general guide as to your home loan options. Clearly there is no guidance as to how long or how severely Covid-19 will impact us. Every person’s situation (and bank) is different so if you have specific questions, please contact us.

The banks have now followed the governments directive on the 24th March to offer borrowers a support package. The package will include a six month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been affected by the economic disruption from COVID-19.

What are my Home Loan options?

  1. Change your repayments
    If you are paying more than the minimum amount, you can reduce your repayments back to the minimum amount immediately. This can usually be done through Internet Banking.  Remember, there may be a cost if you later decide to increase these repayments during the fixed rate period.
     
  2. Interest-only period
    This may be available temporarily where you can still show that you can service your home loan on a reduced household income. A full application will be required and accompanying documentation to support this request will also be required. Not all Banks are offering this option as yet.
     
  3. Mortgage repayment holiday
    This may be available for customers needing to take a break from your home loan repayments for a period of up to 3 months. The Bank will continue to charge interest during this period but will defer the payments (and interest) to the end of the holiday. Ultimately this adds an additional cost to the home loan but the short term cash flow benefit may assist. Importantly repayment holidays are generally for 90 days only so you need to consider whether now is the time to apply or not.

4. Mortgage repayment deferral (New, as per government announcement)

A Mortgage Payment Deferral allows you to take a break from making your contractual mortgage payment for up to six months. Interest will continue to be charged and will be added to your loan at each payment date. 

Please note that you’ll end up paying more over the life of the loan and you may face either increased future payments or a longer loan term, at the end of the payment deferral period. 

Insurance

If you have Mortgage Protection, Income Protection or Business Interruption Insurance then you should discuss this with your Insurance Broker.

We believe the Banks will need to be supportive during these times and we understand that they may be working on a Covid-19 customer assistance package at present.
 
From now on we at Eightfold will be working from home. We are also aware that the Banks are enacting their Back Up Plans which will also require some, if not all staff to work remotely. This will have a direct impact on turnaround times and we ask that you please be patient and bear with us during this time.
 
Please do not hesitate to contact us if you have any questions. We’re here to help,

from the team at Eightfold.

Investing in central city apartments

A guest post from Impression Real Estate

It’s a great time to own property in Auckland.

It might not seem that way when prices are flat, but that’s only because we’ve been spoiled over the 2010 to 2016 period – it’s been an incredible run. From our point of view, after five storming years we’re back to normal; yields are reasonable, prices are not far off their peaks and interest rates are rock-bottom.

The Auckland CBD apartment market has been flatter than the wider residential property market, which is not too surprising because apartments are traditionally more volatile when it comes to pricing. Vacancies did rise recently, peaking at 4.5% in April this year. That’s higher than we’ve seen in a while, but once again we’ve been spoilt by five years of vacancy levels below 3%. Looking back to 2005 we’d sometimes see vacancy levels up to 15% in the CBD, so even 4.5% is impressively low. Happily, that vacancy rate has dropped down below 3% again now – this is the new normal.

That high level of demand has helped the central city to soak up all the new apartment buildings that have been completed over the past two or three years. We were concerned that the influx of brand-new residences would reduce rents and prices; it seems to have slightly lowered prices but had negligible impact on rents. Over the past five years, owner occupiers have been influential in taking some of the smarter apartments out of the market (particularly brand-new ones), which has helped to prop up prices. Tony Alexander at BNZ believes Auckland still has a shortage of housing and what we see in the market every day supports that idea.

For apartment investors, the flat market means you have the luxury of being picky. You don’t need to rush; you have ample time to do your due diligence and be certain that you’re not buying a lemon. Most of our buyers are looking for yields in the 6.5% to 7% range – not a massive yield compared to the heady days pre-2010, but a significant improvement on the 2% or 3% you’ll get from a typical term deposit at the bank.

You might get a slightly higher return on Airbnb, although you’ll certainly have to work for it. With the Auckland Council’s bed tax hitting hard; a lot of the wind has been knocked out of the sails for Airbnb hosts. Ironic, really, when the America’s Cup pre-races start next year and there should be serious demand for properties. We’re still running some very successful short-term rental properties, but they can be marginal once the bed tax is paid so you’ll need to do your numbers on any individual property.

Overall, apartments in Auckland are well-priced right now with plenty of choice and solid yields. As an investor, you have your pick of apartments and you should expect to see strong long-term capital gains. There’s more demand for smaller property types than there has ever been, alongside a continuing affordability squeeze. And Auckland itself could not be more appealing as a place to invest your money. The city is growing, its economy is robust, and the lifestyle is world class. The government and local council are putting money into the city to keep improving it and we have the America’s Cup coming here to showcase our gorgeous harbours and tourist-friendly downtown precinct. It’s a great time to invest – and live – in Auckland.

Time for a financial spring clean?

Spring is the time we take advantage of the improving weather, longer daylight hours and often even our better mood to get our homes in order.  It is also a great time to have a financial spring clean. When was the last time you took a look at your

  • Insurance?
  • Mortgage?
  • Credit cards
  • Bank accounts?
  • Shares?
  • or Will?

Check out some suggestions from the Eightfold team on how you can carry out your own financial spring clean.

Insurance
– When was the last time you reviewed your Life Insurance?
– Have your circumstances changed since you started your cover?

You may be over-insured, under-insured or if you’ve got one of the bank policies – paying for very watered-down coverage.

Reviewing Life Cover, Trauma Cover and Income Protection can be very complicated and time consuming to do yourself. The great news is, you don’t have to. Let us do all the hard work for you, with the bonus that we provide this service to all Eightfold clients free of charge!

Mortgages
As Banks continue to lower interest rates, the way in which they calculate customers debt servicing has also been lowered. This means that as a customer you may be able to borrow a bit more. We are seeing evidence of this, resulting in more market activity. It also means that there may be an advantage to breaking existing loans and re-fixing at lower rates – talk to your Adviser to find out if this could be right for you.

Credit cards and accounts
With banks focusing on sales targets we’re often sold banking products we don’t need, or which become redundant over time, such as a savings account or credit card that have sat there doing nothing for years but are costing you money in annual fees. It’s good to occasionally review these and clean up or close what’s no longer required.

On credit cards have a think about card limits. If you no longer need the limit you have, from a security point of view it’s a good practice to lower that back down to what you need now

Shares
Many New Zealand investors are sporadic in their approach to buying and selling shares. In the heat of an IPO with the market talking up the investment opportunity, many of us have purchased shares. But how often do we stop to consider how they’ve performed and if you should keep or sell them? Make it part of your spring clean to review these and consider your options.

Wills
As we go through life, our family dynamic changes. We have children, lose parents and circumstances change. Wills are designed to be living documents and need to be reviewed regularly on our journey through life to ensure they reflect the legacy you want to leave behind.

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