NZ Home Loans (NZHL)

[Beano]

You have three accounts
1: A fixed period loan which is generally the lowest interest rate
2: Have a floating commercial loan which is generally the lowest interest rate as an account to clear surpluses or shortfalls to
3: A credit card which has no fees and earns benefits

Use the credit card to buy things pay the credit card on the day the rents come in
Match the bank mortgages to the day the rents come in

[samlarson]

how do they structure the loan. Also, check out these personal loans affiliate programs so you can build up you passive income They say revolving but how it is set up to clear mortgage faster. I know there is two accounts - one for fixed and one for revolving. all money received and spend goes thru a revolving account.

I'm also interested in this moment because it all sounds way too good

[primal]

how do they structure the loan. They say revolving but how it is set up to clear mortgage faster. I know there is two accounts - one for fixed and one for revolving . all money received and spend goes thru revolving account.

[kazzp]

I dont follow what you mean sorry?



Yea I like the thought of having something like this with Westpac, ideally something with a decreasing limit and having it with an actual bank makes me feel more secure

There is nothing unusual or risky I can see about NZ Home Loans - they borrow from Kiwibank and are owned by Kiwi Group Holdings Ltd who own Kiwibank and NZ Post. They just structure your mortgage to help you pay it off faster - something most banks have no incentive to do.

[BradFromNZ]

over investment property

I dont follow what you mean sorry?

We had loans with them years ago and at the time the offset mortgage was innovative. We have the same with Westpac now. It is like having a low interest rate credit card but the maximum limit decreases like a table mortgage so at eg age 65 there is no more credit. You might be able to get one from them where the limit stays the same. If you tend to spend it isn’t a great idea. But if you have good self control it is very useful.

Yea I like the thought of having something like this with Westpac, ideally something with a decreasing limit and having it with an actual bank makes me feel more secure

[Chris W]

am not warning about regular bank lending terms+conditions

but the highly likely extra hooks in non-bank lending

hopefully anyone interested in one of those loans will make extra efforts to fully understand the differences and extra risks

am thinking of the case a few years ago where the big banks sold taranaki farmers interest rate swaps as if they were fixed rate loans

they weren't and after the financial crisis the banks started demanding huge amounts from the farmers

as a group, the farmers challenged the complexity of the derivatives in court and won

afaik their case was strengthened by 3 things

1. it was the countries biggest banks

2. there were many farmers caught

3. due to the bad publicity the banks didn't appeal the decision

https://www.stuff.co.nz/business/far...-bank--and-won

imho if it had been just a couple of farmers with a non-bank lender they would have lost their farms

In an environment of increasing interest rates, it looks like the farmers entered into fixed for floating interest rate swaps to fix their interest rate.

They wanted to fix their interest rate so that it did not increase. It was an explicit bet on interest rates by the farmers.

If interest rates had remained above the level which the farmers had fixed their interest rate, then the farmers would have benefited.

Imagine agreeing to fixing your interest rate for the next 20 years in 2007 at say 9%. If interest rates stayed above 9% over that 20 year time period, the farmer would have benefited.

Instead the interest rates fell below the rate that they fixed at - so the farmers were caught paying a higher interest rate than the market interest rate.

Now that agreement to pay 9% for the next 20 years doesn't look so good when interest rates have fallen to say 5%.

[donna]

what is REALLY important in non-traditional? financial products

is the fine print

we can't go into fine print in any depth here because there is so much of it

and it's all different!

but here's a story from overseas

my sister in law was wanting to rent an apartment + needed a guarantor to get the lease

my wife had previously been her guarantor but when the real estate company noticed my wife had a new surname

meaning she was married

they wanted me as the guarantor

i asked what my "liability" was

they seemed puzzled by the term, so i gave an example

"my sister-in-law smokes, if she were to fall asleep and drop a cigarette into some highly flammable synthetic bedding

resulting in her death, the death of many others, and the gutting of a multi-story apartment building in a very expensive city

what would be the maximum it could cost me?"

......


there was a pause and then they said, "that very rarely happens..."

and i said

"wrong answer!"

so when looking at new + uncommon financially-engineered products

i recommend your questions always be along the lines of...

"how much am i exposed?

what is the worst that could go wrong?

could this in any way, shape or form

lead to me or my loved ones being evicted onto the streets?"

and record the questions and answers

if they won't put them on paper

....

remember

if you have a term deposit in 1 of the big 4 banks, and they fold

the gov. is likely to bail you out

but if you've gone "off-grid"

you'll probably

end up in

a cold, dark hole in the ground

burning bark to cook your children's dinner

Love it Eri - as you say if you're thinking "it's too good to be true" - that's because it is.

There's a catch in there somewhere - find it and then decide if it's the deal of the century.

cheers,

Donna

[hawkeye]

We had loans with them years ago and at the time the offset mortgage was innovative. We have the same with Westpac now. It is like having a low interest rate credit card but the maximum limit decreases like a table mortgage so at eg age 65 there is no more credit. You might be able to get one from them where the limit stays the same. If you tend to spend it isn’t a great idea. But if you have good self control it is very useful.

[eri]

(excuse the ignorance here but...) how do you get a mortgage that doesn't include the home you live in?

over investment property

[eri]

am not warning about regular bank lending terms+conditions

but the highly likely extra hooks in non-bank lending

hopefully anyone interested in one of those loans will make extra efforts to fully understand the differences and extra risks

am thinking of the case a few years ago where the big banks sold taranaki farmers interest rate swaps as if they were fixed rate loans

they weren't and after the financial crisis the banks started demanding huge amounts from the farmers

as a group, the farmers challenged the complexity of the derivatives in court and won

afaik their case was strengthened by 3 things

1. it was the countries biggest banks

2. there were many farmers caught

3. due to the bad publicity the banks didn't appeal the decision

https://www.stuff.co.nz/business/far...-bank--and-won

imho if it had been just a couple of farmers with a non-bank lender they would have lost their farms

[BradFromNZ]

no

none of my mortgages

have ever included the home we live in

(excuse the ignorance here but...) how do you get a mortgage that doesn't include the home you live in?

[Learning]

Fair enough. Though, most people do get mortgages on property they (or a loved one) will be living in. Not always the most astute financial decision. As when done so your "worst case" risk is applicable. I would hope most people would be aware of this.

[eri]

no

none of my mortgages

have ever included the home we live in

even though

the banks have always been willing

to include it

[Learning]

what is the worst that could go wrong? could this in any way, shape or form lead to me or my loved ones being evicted onto the streets?

Isn't that the case of every mortgage, ever?

[eri]

what is REALLY important in non-traditional? financial products

is the fine print

we can't go into fine print in any depth here because there is so much of it

and it's all different!

but here's a story from overseas

my sister in law was wanting to rent an apartment + needed a guarantor to get the lease

my wife had previously been her guarantor but when the real estate company noticed my wife had a new surname

meaning she was married

they wanted me as the guarantor

i asked what my "liability" was

they seemed puzzled by the term, so i gave an example

"my sister-in-law smokes, if she were to fall asleep and drop a cigarette into some highly flammable synthetic bedding

resulting in her death, the death of many others, and the gutting of a multi-story apartment building in a very expensive city

what would be the maximum it could cost me?"

......


there was a pause and then they said, "that very rarely happens..."

and i said

"wrong answer!"

so when looking at new + uncommon financially-engineered products

i recommend your questions always be along the lines of...

"how much am i exposed?

what is the worst that could go wrong?

could this in any way, shape or form

lead to me or my loved ones being evicted onto the streets?"

and record the questions and answers

if they won't put them on paper

....

remember

if you have a term deposit in 1 of the big 4 banks, and they fold

the gov. is likely to bail you out

but if you've gone "off-grid"

you'll probably

end up in

a cold, dark hole in the ground

burning bark to cook your children's dinner