Loan and mortgage options
Loan and mortgage options
As a rule of thumb, you should be paying no more than one-third of your income in mortgage payments.
We recommend that you prequalify for a loan before you start looking for properties. This will save you time when you are ready to make an offer for a property. This can be an advantage in a competitive market.
It is sometimes difficult to work out the mortgage option that best suits you.
There are floating and fixed interest term loans where interest and principal are paid. Interest-only mortgages are also available.
If you think that interest rates will rise then a fixed-rate mortgage might be best. You will know precisely what your instalment payments will be and you can budget around this.
A floating rate mortgage means that rates float with the market - up and down. Lending institutions lend different percentages of the purchase price. They also have restrictions based on your net income.
The following links let you work out what your loan repayments will cost:
ASB Bank Limited home loan calculator
New Zealand Home Loans calculator
The Co-operative Bank home loan calculator
TSB interest home loan calculator
How do I choose the best loan for me?
Your personal situation will determine the best kind of loan for you. By asking yourself a few questions, you can help narrow your search among the many options available and discover which loan suits you best.
Do you expect your finances to change over the next few years?
Are you planning to live in this home for a long period of time?
Are you comfortable with the idea of a changing mortgage payment amount?
Do you wish to be free of mortgage debt as your children approach college age or as you prepare for retirement?
Your mortgage broker or lender can help you use your answers to questions such as these to decide which loan best fits your needs
What is the best way to compare lenders?
Either engage a mortgage broker to assist you with this complex task or devise a checklist for the information from each lending institution. You should include the company's name and basic information, the type of mortgage, minimum down payment required, interest rate and points, closing costs, loan processing time, and whether prepayment is allowed.
