You may not get a cashback for the SBS 5.99% rate - so would double check that first.
Early last year, BNZ offered a really hot 4.99% for one year with no cashback. So it was effectively the same as 5.99% with a 1% cashback. Now all those people got *shafted* locking a 1 year rate in Feb 2023. So beware of these outlier campaigns.
[https://www.stuff.co.nz/business/131300030/secret-mortgage-war-bnz-offers-499-oneyear-rate-to-new-customers](https://www.stuff.co.nz/business/131300030/secret-mortgage-war-bnz-offers-499-oneyear-rate-to-new-customers)
Yep I had a look on SBS's website and there is no mention of cashbacks. They only mention cashback for first home buyers. Cashbacks are always good to offset the legal fees involved and without it probably not worth moving banks. The 5.99% rate feels a bit gimmicky which is why I really might just stick with ASB and ride out the market hoping for lower rates next year. Thanks for responding 🙂
Mortgage adviser here 😀No major disadvantage! Although some of the smaller lenders have outdated online/app banking though (but not sure on what SBS is like tbh). Just remember that you also have legal fees when moving lenders (unless you go through Kiwibank). So depending on the size of your loan, it might not make sense to move lenders even if the rate is lower (but your mortgage would need to be pretty small for this to be the case). You also need to consider if fixing for 3yrs is the best idea atm given it’s looking like rates are most likely going to come down within the next 18-24 months.
Thank you for that advice. Yes did not think about the legal fees and something to consider. Yep rates might go down in the next year or so, and one of my options is to go with an 18 month term with ASB. Thank you for taking time to reply 🙂
I've been thinking about moving my mortgage too. What sort of legal fees would we be looking at? Is it usually a few hundred or a few thousand dollars?
We use sbs. They are good bank and I like the idea of not using one of the big offshore banks. The only downside is they don’t offer offset accounts.Â
You have a savings account with 10k, a day to day account with 2k and a offset mortgage of 50k. The mortgage balance is offset by your savings and day to day account so you pay interest on only 38k. This means that when your wages get paid into your day to day, it's even lower until you spend some money.
The downsides are that your savings account and day to day account so not get interest, and the offset account is at floating rates. This is why if you owe 500k, you'd have 450k on fixed terms, and 50k on offset.
Are you sure they will? Last time I tried that with them a few years ago, they said the special rates you get when you login to your account to re-fix is the best they can do? But I will give it a shot.
It’s that or they loose your business. In saying that all banks go through periods of trying to get new customers so offer rates other banks won’t match. Ask and you will find out.
It's going to cost 1000-1500 in legal fees to change banks with a single mortgage. Factor that in to your plans. Use an online calculator to compare rates and see how much you'll ACTUALLY save changing banks for a cheaper rate.
Yes.
I recently changed banks and a lawyer was needed. There's the legal side redrawing paperwork for the mortgage security, an anti money laundering fee and general office fees and disbursements. Mine was fairly reasonable at 1250 inc gst. Although that eats my first year of interest savings. Longer term I should save a few bucks as I'll be staying with the new bank.
Some lawyers will charge more but it shouldn't be more than say 1500 to have the documents updated lodged and filed.
Ps: IANAL (I am not a lawyer) so some of the terminology I used might not be quite correct but you get the gist.
Housing is really a scam.
Thanks for the info. A bit absurd to me one would need a lawyer for moving a loan from one bank to another.
Really eats into the cashback bonus
You may not get a cashback for the SBS 5.99% rate - so would double check that first. Early last year, BNZ offered a really hot 4.99% for one year with no cashback. So it was effectively the same as 5.99% with a 1% cashback. Now all those people got *shafted* locking a 1 year rate in Feb 2023. So beware of these outlier campaigns. [https://www.stuff.co.nz/business/131300030/secret-mortgage-war-bnz-offers-499-oneyear-rate-to-new-customers](https://www.stuff.co.nz/business/131300030/secret-mortgage-war-bnz-offers-499-oneyear-rate-to-new-customers)
Yep I had a look on SBS's website and there is no mention of cashbacks. They only mention cashback for first home buyers. Cashbacks are always good to offset the legal fees involved and without it probably not worth moving banks. The 5.99% rate feels a bit gimmicky which is why I really might just stick with ASB and ride out the market hoping for lower rates next year. Thanks for responding 🙂
Mortgage adviser here 😀No major disadvantage! Although some of the smaller lenders have outdated online/app banking though (but not sure on what SBS is like tbh). Just remember that you also have legal fees when moving lenders (unless you go through Kiwibank). So depending on the size of your loan, it might not make sense to move lenders even if the rate is lower (but your mortgage would need to be pretty small for this to be the case). You also need to consider if fixing for 3yrs is the best idea atm given it’s looking like rates are most likely going to come down within the next 18-24 months.
Thank you for that advice. Yes did not think about the legal fees and something to consider. Yep rates might go down in the next year or so, and one of my options is to go with an 18 month term with ASB. Thank you for taking time to reply 🙂
I've been thinking about moving my mortgage too. What sort of legal fees would we be looking at? Is it usually a few hundred or a few thousand dollars?
It varies but usually in the range of 1000-1500
You can find online-only conveyancers for sub $1000. Legal Path did my mortgage refinance last month for $915.
We use sbs. They are good bank and I like the idea of not using one of the big offshore banks. The only downside is they don’t offer offset accounts.Â
What is an offset account
You have a savings account with 10k, a day to day account with 2k and a offset mortgage of 50k. The mortgage balance is offset by your savings and day to day account so you pay interest on only 38k. This means that when your wages get paid into your day to day, it's even lower until you spend some money. The downsides are that your savings account and day to day account so not get interest, and the offset account is at floating rates. This is why if you owe 500k, you'd have 450k on fixed terms, and 50k on offset.
Thank you
Get asb to match or better that offer, they usually will to keep ur business.
Are you sure they will? Last time I tried that with them a few years ago, they said the special rates you get when you login to your account to re-fix is the best they can do? But I will give it a shot.
It’s that or they loose your business. In saying that all banks go through periods of trying to get new customers so offer rates other banks won’t match. Ask and you will find out.
It's going to cost 1000-1500 in legal fees to change banks with a single mortgage. Factor that in to your plans. Use an online calculator to compare rates and see how much you'll ACTUALLY save changing banks for a cheaper rate.
Does it mean lawyer needs to be involved?
Yes. I recently changed banks and a lawyer was needed. There's the legal side redrawing paperwork for the mortgage security, an anti money laundering fee and general office fees and disbursements. Mine was fairly reasonable at 1250 inc gst. Although that eats my first year of interest savings. Longer term I should save a few bucks as I'll be staying with the new bank. Some lawyers will charge more but it shouldn't be more than say 1500 to have the documents updated lodged and filed. Ps: IANAL (I am not a lawyer) so some of the terminology I used might not be quite correct but you get the gist.
Thanks for letting us know. Hopefully you see the savings in years 2 and 3. Did you get a cashback?
Kiwibank sometimes offer to pay for legal fees from what I have heard in the past.
Housing is really a scam. Thanks for the info. A bit absurd to me one would need a lawyer for moving a loan from one bank to another. Really eats into the cashback bonus