Tons of people residing in New Zealand look for a home loan when they plan to get a new home. Home loan are of many types depending upon the interest rates and repayment procedure. Individuals don’t generally like to spend time on knowing the details of every category of home loan in depth but having an idea is important because it can save a couple of dollars at the time of repayment. Home loan mortgage rate differs slightly but its corresponding difference in actual amount varies largely, mainly because the amount of loan is large in developed countries like New Zealand.
There are certain factors that should be taken into consideration at the time of taking a home loan. First of all, one needs to determine the budget for the home and hence the amount of loan. Next, the interest rate is the primary factor that determines the selection of mortgage type as well as the financial institution. As mortgage rates differ, it is imperative to choose one that offers the lowest rate of interest. Starting with the floating home loan, there are many subdivisions so the rate of interest differs with the plans.
Some common floating mortgage plans i.e. Total money, mortgage one, rapid repay, fly buys and global plus charge interest at the rate of 5.74%,6.40%, 5.99%, 5.99% and 5.99% per annum respectively. When it comes to fixed home loan, three plans are available. These are classic, fly buys and global plus home loan. Classic plan is the traditional type of loan i.e. completely fixed loan whereas fly buys and global plus are floating type but can be altered to the fixed method. Classic method of repayment is further offered in two options i.e. 1 and a half year repayment plan and 3 year repayment. The rate of interest is charged at 5.39% and 6.29% in 18 months and 36 months installment respectively. When it comes to fly buys and global plus loan, the rate of interest varies with the duration of repayment. The maximum of 7 years repayment period is permitted by the financial institution.
There are several other charges that are charged when one opts for home loans. These charges are jointly termed as service fees. Various fees such as establishment fee, re-fix fee, re-documentation fee, top-up fee, re-draw fee and rates arrears fee falls into this category of charges that come hand-in-hand with the mortgage plans. All these charges, except global plus mortgage, are applicable for every home loan. The sum of money is fixed in the service fees. A maximum of $400 can be charged as establishment charges whereas one cannot charge more than $150, $250, $250, $25 and $35 for rollover, top up, re-documentation, re-draw and rates arrears fee respectively.
Before one chooses a suitable home loan plan, mortgage rates comparison is the activity that should never be ignored. As the interest rates and conveniences provided to clients differ as per the plans, one must analyze his financial position and choose the most suitable plan so that the amount of loan can be repaid without facing any kind of financial or legal troubles.