Kiwibank is expected to launch a mortgage offset product similar to Bank of New Zealand's “Total Money” and ANZ/National Bank's “Flexiplus” accounts.
“We believe there is a gap in the market for a well-designed offset product,” Kiwibank spokesman Bruce Thompson says.
BNZ's version allows customers to hold multiple accounts with interest on any positive balances offsetting mortgage interest while ANZ/National's version is a single account with any deposits reducing the amount of the outstanding mortgage.
Meanwhile BNZ says that it has spared customers more than $64 million in interest on their home loans thanks to the offsetting features of the bank's TotalMoney account.
BNZ TotalMoney home loans are a typical floating rate loan that allows customers to use money sitting in other accounts to offset the amount of interest they're paying, saving them money and, potentially, enabling them to pay off their home loan sooner.
TotalMoney accounts also allow customers to operate up to 10 accounts for a flat rate fee of $10 per month, any money residing in those accounts will help offset interest payments on a TotalMoney home loan.
BNZ Director of Retail Andy Symons Symons says if you had a mortgage account with $200,000 owing, and another with $50,000 in it, you'd only pay interest on $150,000 and since our TotalMoney home loan rates are lower than our standard floating rate, the savings soon add up.
