Last updated: 9/04/2020

Are you impacted financially by COVID-19?

We have received questions from some of our clients that have faced uncertainty surrounding their job stability and income since the Government announcement of COVID-19 level 4.

To help with the ongoing changes that mortgage holders are facing, we will be keeping this blog current with updates as we receive them.

There are a few options available from banks to provide financial relief to customers impacted by COVID-19.  Before you make a decision about taking up one of these options, you may want to review the financial support options via the Government COVID-19 website for both the self-employed and employees.  The link for this at is at the end of this blog.

 

What are the banks doing?

Banks have announced they are ready to provide the package to mortgage holders for 6-month home loan repayment deferrals (also referred to as home loan repayment holidays).  In this blog, we will detail what each relief option is and what it means for you.  We have provided a general example, however, if you would like to know what this would mean for you based on your own financial situation, please contact your Connect Me Mortgages adviser direct.  We will also detail what each bank’s process is for you to access this relief, followed up by FAQ’s at the end.

 

What relief options are available?

Reduce your repayments – if you are paying more on your loan than what is required, then reduce your payments to the minimum.

 

Restructure your existing loan – banks will consider extending your total loan term out to a maximum of 30 years, which will reduce your regular principal and interest repayments.

As an example, if you have a loan balance of $500,000 owing, fixed at 3.5%, over a total loan term of 25 years, you will have loan repayments of $1,155 per fortnight.  If you have the same loan balance over 30 years, your loan repayments would be $1,036 per fortnight.

As above, if you are paying more than the minimum required, you can look to combine these two options by reducing your repayments and extending your term.  Your overall cost of borrowing will increase by doing this, however, once your finances are back to normal, you can look to reduce the term or increase repayments again.

You can also consider breaking a fixed loan and refixing at a lower rate.  Please note that this may incur a break fee.  Break fees are calculated by the bank on a daily basis.  Lately, what we have found is that the break fee will outweigh the benefit of dropping to a lower rate, however, your repayments will be less.

 

Interest Only – apply to change your principal and interest payments to interest only.  Your loan balance doesn’t change as you are only paying the interest component of your loan, but your repayments are less. 

As an example, a borrower with a loan balance of $500,000 owing, fixed at 3.5%, over a total term of 25 years would have principal and interest repayments of approximately $1,155 per fortnight.  However, on interest-only, these repayments would drop to approximately $673 per fortnight.  When your interest-only period ends, you will go back to paying principal and interest repayments. If you requested your total term be extended by the same number of months as your approved interest-only term, then your repayments will likely be the same as they were before the interest-only period.  If you did not extend the term, then your repayments will likely be slightly higher than the amount you were paying before the interest-only period.  Your overall cost of borrowing will increase by doing this, as you are not reducing what you owe on your loan for a period of time.

 

Loan repayment holiday/deferral – your mortgage repayments are put on hold for up to 6 months.  At the end of the holiday period, your payments will likely be higher, unless the loan term is extended.  This is the most costly option, as the interest charges are still accrued and added to your loan amount. 

As an example, a borrower with a loan balance of $500,000 owing, fixed at 3.5% over a total term of 25 years, in 6 months would owe approximately $508,820.  This is the amount that is now having interest calculated on.  If we assume the rate remained the same throughout the total term, prior to the repayment holiday, the total amount the borrower would repay to the bank over the 25-year life of the loan would be approximately $750,560.  If they take a 6-month repayment holiday and then keep the total loan term at 25 years, the total amount the borrower would repay to the bank over the life of the 25-year loan would be approximately $763,810.

 

Repayment Calculator

Check out our repayment calculator; otherwise for advice on the costs associated with a repayment holiday, please contact your Connect Me Mortgages adviser directly. 

Repayment Calculator

 


 

How do I go about making changes to my home loan?

Each bank has its own process on how to access the above relief options. These are detailed below for each provider:

 

ANZ:

ANZ will consider:

  • up to 12-months interest-only period
  • up to 6-months repayment holiday
  • extension of total loan terms out to 30 years

ANZ has advised that customers can contact their Connect Me Mortgages adviser to assist with all options.  If you are in financial hardship and would like to speak with ANZ directly, please call 0800 240 438 (weekdays 8.30am-8pm, weekends 9am-5pm).

ANZ has advised that customers wanting to enquire about the Business Finance Guarantee Scheme, can register their interest by contacting their ANZ Business Manager or via the ANZ website, by clicking the button below:

Request a call back

For full support options provided by ANZ for both personal and business customers, please click the button below to their website:

Click here

 


 

ASB:

ASB will consider:

  • up to 6-months interest-only period
  • up to 6-months repayment holiday
  • extension of total loan terms out to 30 years

ASB customers can contact their Connect Me Mortgages adviser to assist with all options.  Customers can also access support via their FastNet Classic internet banking.  If you are not registered for this, you can call their COVID-19 special response number on 0800 272 205.  (Monday-Sunday, 8am – 5pm).

For full support options provided by ASB for both personal and business customers, please click the button below to their website:

Click here

 


 

Avanti Finance:

Avanti Finance will consider:

  • loan repayment holiday

Avanti Finance has requested customers financially impacted by Covid-19 are to complete their change in circumstances form, “save as” to their computer and email this to them at COVID19@avantifinance.co.nz. The form can be found here:

Apply here

For full support options provided by Avanti Finance, please click the button below to their website:

 Click here

 


 

Bluestone:

Bluestone will consider:

  • accessing any funds built up in redraw to cover payments
  • repayment holiday
  • partial repayments and other payment arrangements

Bluestone has advised that customers can submit their contact details with Bluestone to request a call back at:

Request a call back

For full support options provided by Bluestone, please click the button below to their website:

 Click here

 


 

BNZ:

BNZ will consider:

  • up to 12-months interest-only period
  • up to 6-months repayment holiday
  • reduce your repayments to the minimum level where possible.
  • Business Finance Guarantee Scheme

BNZ has advised that customers can contact their Connect Me Mortgages Adviser to assist with all options.  If you would like to apply through BNZ online, please click on the button below:

Request a call back

 

BNZ has advised that customers wanting to enquire about the Business Finance Guarantee Scheme, should complete their online enquiry link, this can be accessed by clicking the button below:

Business Finance Guarantee Scheme

 

For full support options provided by BNZ for both personal and business customers, please click the button below to their website:

 Click here

 


 

Kiwibank:

Kiwibank will consider:

  • up to 6-months interest-only period
  • up to 6-months repayment holiday
  • extension of total loan terms out to 30 years

Kiwibank customers can submit a request to discuss support options via their website here:

Request a call back

For full support options provided by Kiwibank, please click the button below to their website.

Click here

 


 

Liberty Finance:

Liberty Finance will consider:

  • extension of total loan terms
  • loan repayment holiday

Liberty Finance has advised that customers can contact their Connect Me Mortgages Adviser to assist with their application for these options.

For full support options provided by Liberty Finance, please click the button below to their website:

 Click here

 


 

NZCU:

NZCU will consider:

  • loan repayment holiday for Personal loans and home loans

NZCU has advised that customers can submit an application for the loan repayment holiday online here:

Apply here

For full support options provided by NZCU, please click the button below to their website:

Click here

 


 

Resimac:

Resimac will consider:

  • extension of total loan terms
  • loan repayment holiday

Resimac has advised that customers can contact their Connect Me Mortgages Adviser to assist with their application for these options.

For full support options provided by Resimac, please click the button below to their website:

Click here

 


 

SBS:

SBS will consider:

  • up to 6-months interest-only period
  • up to 6-months repayment holiday
  • extension of total loan terms

SBS has advised that customers can submit their contact details with SBS to request a call back at:

Request a call back

For full support options provided by SBS, please click the button below to their website:

 Click here

 


 

Sovereign:

Sovereign will consider:

  • up to 6-months interest-only period
  • up to 6-months repayment holiday
  • extension of total loan terms

Please contact your Connect Me Mortgages Adviser directly, to assist you.

 


 

The Co-Operative Bank:

The Co-Operative Bank will consider:

  • interest-only home loan payments
  • up to 6-months repayment holiday
  • extension of total loan terms

The Co-Operative Bank have advised that customers can access support via calling them directly on 0800 554 554 (weekdays 7.30am-8pm, weekends 9am-5pm). They will require you to complete a Financial Hardship form which you can download here:

Apply here

For full support options provided by The Co-Operative Bank, please click the button below to their website:

Click here

 


 

TSB:

TSB will consider:

  • up to 6-months interest-only period
  • up to 6-months repayment holiday

TSB has advised that customers can access support by calling them directly on 0800 872 226 (weekdays 8am-7pm, weekends 9am-5pm).  Customers can apply online to reduce or defer their repayments via their website here:

Apply here

For full support options provided by TSB for both personal and business customers, please click the button below to their website:

Click here

 


 

Westpac:

Westpac will consider:

  • up to 6-months interest-only period
  • up to 6-months repayment holiday
  • extension of total loan terms out to 30 years

Westpac has advised that customers can contact their Connect Me Mortgages Adviser to assist with all options.  If you would like to apply through Westpac online, please click on the button below:

Apply here

Meanwhile, you can also call Westpac directly on 0800 606 606 (weekdays 7am-8pm, weekends 8am-5pm).  For full support options provided by Westpac for both personal and business customers, please click the button below to their website:

Click here

 


 

FAQs:

Who can apply for the loan repayment holiday?

Any home loan or personal loan customer who has been financially impacted by Covid-19.

What’s the eligibility criteria for a loan repayment holiday?

Any customer financially impacted by Covid-19 is eligible.

Will taking a repayment holiday affect my credit rating?

Banks and lenders are working across the industry to ensure that consumer credit ratings will not be affected.

When does the loan repayment holiday begin?

The repayment holiday will start from when your next repayment is due.

Are there any other financial relief options offered by my bank?

Most banks are offering other ways to support their customers that are financially impacted by Covid-19 such as temporary overdraft facilities with management fees waived for three months, waiver of top-up application and redocumentation fees, early access to term investment funds, existing overdraft and credit card repayments deferred for three months. Each bank has its own relief options for both personal and business customers, so please click the links provided for each bank noted above.

 


 

Useful Links:

Government Financial Support

https://covid19.govt.nz/government-actions/financial-support/

Tenancy Services (what landlords and tenants need to know):

https://www.tenancy.govt.nz/about-tenancy-services/news/coronavirus-covid-19-what-landlords-and-tenants-need-to-know/

IRD (tax relief):

https://www.ird.govt.nz/covid-19/tax-relief

Ministry of Health (health advice):

https://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-novel-coronavirus/covid-19-novel-coronavirus-health-advice-general-public

Ministry of Health (taking care of your mental wellbeing):

https://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-novel-coronavirus/covid-19-novel-coronavirus-health-advice-general-public/covid-19-taking-care-your-mental-wellbeing

Ministry of Business, Innovation & Employment:

https://www.mbie.govt.nz/about/open-government-and-official-information/coronavirus-covid-19/

 


 

The Connect Me Team are currently working remotely and will still be providing advice via phone, email, and conducting meetings via video call.

If you would like to talk through your financial situation, please call your Connect Me Mortgages adviser directly.

Click to find your advisers contact details