As the nation comes to a standstill and we prepare ourselves for isolation within our homes, questions around our financial security need answers.
As you may or may not already know the government, with co-operation from the banks, have announced financial support for borrowers. This product is of course the ‘Mortgage Holiday’ which will cover both the principal and interest payments for up to 6 months for those who have had their incomes affected.
A mortgage holiday is when you stop contributing or making any repayments on your mortgage, but interest continues to mount. You will still have to pay that money to the bank at the end of the six months. The Banks offer it to borrowers as an option in times of hardship. It is expected that everyone that applies will be given this benefit, however the banks will look at each scenario on a case-by-case basis to ensure those in need are given priority.
If your income is affected, please get in touch with your bank as soon as possible (see links below) It is imperative you understand the repayment amount waived during this period will be added to your total loan amount. Therefore, at the end of the holiday period your repayments will be higher.
ANZ customers – https://www.anz.co.nz/here-to-help/?pid=RET-CHA-HBA-heretohelp
ASB customers – https://www.asb.co.nz/page/covid-19.html
Westpac customers – https://www.westpac.co.nz/who-we-are/covid-19/
The other option open to borrowers will be to switch their mortgage across to interest-only repayments temporarily but this will depend on your individual scenario and level of equity.
If you are in the process of settling on a property, please get in touch with your solicitor. Your solicitor will be able to give you advice on how to extend the settlement date due to this shutdown without any penalties. With the country now essentially in lock down physically moving into a new residential property becomes an issue. Settlement and possession would need to be deferred to a later date, to be revisited if we are still on level 4 at that stage.
In the meantime please take care of yourself and your loved ones.
Simon & Warren