The Co-operative Bank Home Loans
The Co-operative Bank is a New Zealand bank that is 100% owned by its customers. Founded in 1928, it has operated as The Co-operative Bank since 2011. It offers everything you’d expect from a bank, including accounts, lending, credit cards, insurance, plus great customer satisfaction. The Co-operative Bank is a two-time winner of Canstar’s Most Satisfied Customers | Banking Award, and has won our award for Most Satisfied Customers | Home Loans every year since 2020.
What types of home loans does The Co-operative Bank offer?
The Co-operative Bank offers the following home loans:
Fixed Rate Home Loan
Comes with the certainty of knowing exactly how much your repayments will be, for a fixed period of time. Plus you can make extra repayments each year of your fixed term, of up to 5% of the balance, to help clear your mortgage faster and pay less interest.
Floating Home Loan
Offers the flexibility to make extra repayments or pay the loan off in full whenever you like. Go full floating, or team your floating rate home loan with a portion on a fixed or revolving credit home loan for added flexibility.
Revolving Credit Home Loan
A transaction account and loan all in one. Your loan becomes an everyday account – with your money flowing in and out of it. Interest is charged based on what you’ve used of the limit each day. By accumulating all your cash in this account, you can keep your balance as low as possible – saving you interest costs.
First Home Buyers
The Co-operative Bank offers a special low rate for first home buyers, on new lending from $200,000. A minimum 20% equity is required. And the offer is also available for Kainga Ora First Home Loans.
How do I apply for a home loan from The Co-operative Bank?
You can apply by phone or online, or via a Mobile Mortgage Manager, who will visit you in your home. For more details, check out The Co-operative Bank’s website.
Before you start your application for a home loan, you will need evidence of your:
- Income, including salary, dividends, rent, business profits, etc
- Expenses, such as food, rent, bills, loan debts, insurance, etc
- Deposit – how much cash or equity you have, including any KiwiSaver investments
- Personal details, including a form of valid photo ID, such as your passport or driver’s licence
Canstar’s free comparison tool gives you the ability to compare The Co-operative Bank’s home-loan products with those from other lenders in the mortgage market. For more details, just click on the button below.
Helpful Home Loans Information
Here are the four most common types of home loans:
Fixed-rate home loan
A fixed-rate home loan has an interest rate that is set for a fixed time period, commonly between one and three years years.
The main advantage of a fixed-rate loan is that it gives you certainty of your repayments over the fixed term.
The main disadvantage of a fixed rate loan is its inflexibility; generally, large additional payments cannot be made. You’ll probably also face a break fee if you decide to switch mortgages or lenders before the end of the fixed term.
Floating-rate home loan
A floating-rate loan has an interest rate that rises and falls over the period of your home loan. This can be in response to movements in the Official Cash Rate, or due to a business decision by your financial institution.
The main advantage of a floating-rate loan is its flexibility. While you must meet your minimum repayments, you can pay off extra lump sums whenever you want to. There are also no financial penalties if you decide to switch mortgages or lenders.
A disadvantage of a floating rate loan is that your minimum repayment amount can rise or fall at any time. Floating rates are also usually higher than fixed rates.
Interest-only home loan
Instead of paying off your principal loan, plus interest repayments, you only pay off the interest fees. This type of loan is most often used by investors who intend to sell the property for capital gains.
Interest-only home loans are not recommended for standard owner-occupiers, due to the increased long-term interest costs associated with not paying off the loan principal (the original loan amount).
Generally, interest-only home loans have a short time frame (up to five years) before they revert to a standard principal and interest loan.
Line of credit home loan
A line of credit home loan is a mortgage that allows you to borrow against the equity in your home. It gives you the ability and flexibility to access a portion of the equity at any time, up to an agreed limit, in a similar way to an overdraft.
You only pay interest on any sum borrowed, usually at a variable rate, which means you can make extra payments to reduce the sum owed at any time.
Other home loan features
There are many different features that can be attached to your home loan, which can include:
- An offset account
- A redraw facility
- The ability to make extra repayments
- The ability to split the loan between fixed and variable (floating)
- The ability to switch to a different type of loan
- Ability to pre-pay interest
- Online functionality
- Lending terms, including its LVR (loan to value ratio)
- Guarantor security availability
A summary of features that we look for in an outstanding value home loan are contained in the Methodology attached to our latest Home Loan Star Ratings.