“According to our research, Kiwibank was the stand-out performer,” says Jose George, general manager of Canstar New Zealand.
“Kiwibank was the only home loan provider to receive a 5-star rating for overall customer satisfaction, where key drivers of satisfaction included customer service, value for money, interest rates, the loan process and flexibility of the loan.”
The results come from Canstar’s national survey, which asked nearly 900 New Zealanders currently managing home loan repayments to rate their provider on a number of factors.
Across New Zealand, the affordability of housing has been a hot topic in recent years, and it was interesting to note through Canstar’s research that 49% of the survey respondents were managing a mortgage on their first and only home.
“New Zealanders have enjoyed low rate home loans for a long period of time, however, recent changes to New Zealand’s Official Cash Rate (OCR) have paved the way for record low interest rates and a very competitive home loan sector,” Mr George says.
The research showed that 67% of the respondents had chosen to fix their mortgage rate, despite holding the expectation that interest rates on home loans would drop over the next twelve months.
“[At the time of writing] Kiwibank offers New Zealand’s most competitive one-year fixed mortgage rate at 3.55% – which certainly makes the brand stand out from the crowd in terms of home loan offerings,” Mr George says.
Canstar compares home loans to help you find which loan is best suited to your financial situation. Click into the comparison tool below, to help streamline your decision-making process.
What to consider before choosing between a fixed or floating home loan
Recent cuts to New Zealand’s Official Cash Rate (OCR) have made borrowing more attractive than ever, leaving many home owners and home-owners-to-be considering their options in regards to a home loan.
In the current low-rate environment, it is important to understand the differences between what is available to you. Fixed-term loans, for example, give borrowers a degree of certainty, whilst floating-rate mortgages can offer the mortgagor flexibility.
Here, Canstar outlines some key considerations when deciding between a fixed or floating home loan:
- Your budget: Fluctuating interest rates have an impact of floating loans, which means that you can’t necessarily budget a set amount for your mortgage long-term. If you’re currently only just able to meet repayments then a floating rate may be too risky. For conservative borrowers, opting for a fixed rate home loan can offer manageable, set mortgage repayments which is easily budgeted for each month.
- Interest rate changes: Home loan rates are always subject to change, and that’s the calculated risk many take when choosing to fix a home loan rate. If rates move downward, it can be good news for those with a floating mortgage but not so great for those who have already fixed their loan. If you choose, you may be able to take advantage of a split loan – meaning part fixed, part floating, which can offer the best of both worlds in a low-rate environment.
- How long you’re planning on owning the house: Break fees attached to fixed rate mortgages can be substantial, so if you are planning on selling at some point in the near future, it is worthwhile to calculate whether you will benefit more from fixing your home loan with the potential of breaking it, or choosing a floating rate for your home loan.
For more information on the pros and cons of fixed and floating rate home loans, check out what else Canstar has to say here.