Kiwis Face Budget Crunch, Negotiate Deals With Their Banks

April 18, 2023: Kiwis are actively negotiating with their banks as they find ways to manage their finances amid the cost-of-living crisis.

New research from Canstar shows that nearly one in five mortgage holders negotiated with their home loan provider and found a satisfactory way to lessen their mortgage repayments. New arrangements included mortgage holidays, longer mortgage terms and interest-only payments.

The research also reveals the extent Kiwis are cutting back on lifestyle choices in order to balance their budgets. An extraordinary 60% of mortgage-holders say they have pulled back on non-essential costs, with the majority saying this has led to reduced spending on dining out, entertainment and fashion items. Another one in five says they have cut back on both essential and non-essential costs, including groceries and car usage.

Canstar New Zealand General Manager Jose George said the research underlined the pressure on Kiwi households, and the benefits of working with home loan providers. “At times like this, we really encourage New Zealanders to step back and consider all their household outgoings, and if new arrangements can be made. It is a good time to consider if you are with the right home loan provider, or have the right mortgage structure. It’s not necessarily easy to change banks, but it may be worth exploring. There are also ways to cut back on home loan repayments, such as negotiating with your existing bank if you are about to refix your loan, or structuring your debt differently.”

In this environment, Canstar is particularly proud to announce the winner of its Bank of the Year, Home Loans award. It’s TSB! The provider - which also scooped Bank of the Year, Credit Cards, last month - won as a result of its competitive offers and excellent Customer Satisfaction ratings.

Mr George said the award was well deserved. “TSB offers highly competitive home loans for both residential and investment properties, which contributed to this win. Importantly, however, it also rated extremely well in Customer Satisfaction, which considers factors such as service, communication and value for money. At a time of such intense financial pressure, this makes a huge difference.”

TSB General Manager Product and Marketing, Joe Bishop, says, “We’re incredibly proud to receive the Bank of the Year, Home Loans award. This recognises we’re providing both excellent customer service and Canstar-awarded industry leading products. Our commitment to customer satisfaction is critical to achieving this, and the relationships we have with our customers play an extremely important role in everything we do.”

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