It’s been a tough few years for first home buyers (FHBs). First, house prices soared, due to pandemic-induced low interest rates. Then, as a consequence of rising inflation, mortgage rates more than doubled.
However, as house prices have eased – down around 20% from their 2021 peak – FHBs have returned to the market. The latest Reserve Bank figures show, over the past year, while the number of mortgages issued to owner-occupiers and investors dropped, -5% and -12% respectively, new FHB loans increased, up 15%.
Despite higher mortgage rates, a cooler housing market and the relaxation of the LVR restrictions has provided more opportunity for young Kiwis to purchase a first home. And to reflect these market changes, this year Canstar’s expert research panel tweaked its methodology when crunching the numbers for its Bank of the Year | First Home Buyers Award, which has been won by SBS Bank.
Based on extensive research and a sophisticated and unique methodology, our Bank of the Year | First Home Buyers Award recognises the bank that offers not only outstanding value home loans, in terms of fees and interest rates, but also great customer service. Specifically, this includes tools and advice that help FHBs make informed choices when making the biggest financial decision of their lives.
To be included in our award, financial institutions have to provide mortgage products that cover floating, 1-, 2- and 3-year fixed rate terms. They must also offer a full range of banking products, plus have face-to-face staff available, whether in branches or working as mobile lenders across the motu.
How is the Canstar First Home Buyer Award calculated?
Overall, Canstar’s expert research team considers five categories, which follow a customer’s journey through the life of their home loan. And, as we mention above, this year our award methodology has been tweaked:
- Extra weight has been attributed to a lender’s performance in the low-deposit loan categories, for mortgages with LVRs of 80% and 90%
- Special offers for FHBs were reviewed and updated for this year’s price calculations
- Fixed-rate FHB offers have also been included in our calculations
The five main categories considered are:
1 Planning for a first home
How the institution supports consumers during the planning stages of buying their first home, through providing budgeting tools, access to property research facilities and the provision of competitive savings accounts to help saving towards a deposit.
2 Applying for and settling a first home
How the institution supports consumers in the application and settlement stages of the loan. The different application channels offered by the institution, the types of security available against the loan, and the range of guarantee and deposit options available.
3 Managing a home loan
Considers day-to-day management of the loan, any variations to the loan that may be required and the total cost of the loan.
4 Getting assistance on a home loan
How the institution supports consumers over the life of the loan. Considers the availability and forms of online and call centre assistance, and the physical presence of the institution through branches and mobile lenders.
5 Closing a home loan
The ease and cost associated with discharging the loan.
Why SBS Bank is Canstar’s Bank of the Year | First Home Buyers for the second year in a row?
This year’s award win marks back-to-back accolades for SBS Bank. Once again, the lender’s fantastic FirstHome Combo deal and market-leading interest rates helped place it above the competition.
However, this year, the bank’s competitive pricing for low-deposit loans, at both 80% and 90% LVRs, also earned high praise from our research team.
SBS Bank’s FirstHome Combo offers a range of benefits for customers who bundle all their banking, insurance and KiwiSaver products with the financial provider:
- Interest rate of 6.19% p.a. fixed for one year. Or, if you’re building, a discount of 2.55% on the bank’s standard floating rate
- $2000 cash to help cover the costs connected to purchasing your first home
- $1000 to help cover your first year’s home and contents insurance premiums on policies with SBS Insurance
- Interest-free balance transfer up to $2000 for 24 months on an SBS Visa Credit Card
- $1000 top-up for Lifestages KiwiSaver Scheme account(s)
So if you’re a prospective FHB, then make sure that when you are comparing lenders for the best deal in the market, you consider SBS Bank. The winner of Canstar’s award for Bank of the Year | First Home Buyers. for the second consecutive year.
First home buyer: compare home loans with Canstar
If you’re in the process of securing finance, you’ll need to shop around to get the best deal. Which is where Canstar can help.
The table below displays some of the 2-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
About the author of this page
This report was written by Canstar’s Editor, Bruce Pitchers. Bruce has three decades’ experience as a journalist and has worked for major media companies in the UK and Australasia, including ACP, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ. Prior to Canstar, he worked as a freelancer, including for The Australian Financial Review, the NZ Financial Markets Authority, and for real estate companies on both sides of the Tasman.
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