BNZ drops its TotalMoney rate to 5.99%

23 July 2015

BNZ drops its TotalMoney rate to 5.99%

· TotalMoney floating mortgage rate drops from 6.34% to 5.99%
· Effective interest rate on TotalMoney could be just 4.49%
· Customers could take 10 years off mortgage.

BNZ has dropped the interest rate on its floating home loan product TotalMoney*, at a greater rate than the decrease to the OCR – from 6.34% to 5.99%

BNZ Director of Retail and Marketing Craig Herbison said with rates constantly moving, it may be time for mortgage holders to consider floating.

“People might be surprised to learn that with BNZ, a floating rate can end up lower than fixed, thanks to TotalMoney, which takes into consideration a customer’s savings with BNZ,” said Craig.

“For example, if a customer has a $200,000 mortgage and $50,000 in savings, we only calculate interest on $150,000. This means the effective interest rate is 4.49% per annum versus the carded rate of 5.99%. In this scenario, a 30-year loan could be shortened by 10 years, potentially saving the customer $50,000 over the life of the loan,” he said.

“In this example, the TotalMoney effective floating rate is actually lower than today’s Classic fixed two-year rate of 4.99%. I think it’s the market’s best-kept secret,” Craig said.

"The market is changing at pace, and this new rate, and the potential effective rate, will give people coming off fixed term or looking for new lending, the chance to consider that floating may now be the best option for them. "

The new rate is effective Monday 27 July 2015 for new customers, and 11 August 2015 for existing customers.

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