Questions from the Port Hills Red Zone Workshops

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1 Questions from the Port Hills Red Zone Workshops BANKING Value of the property If the red zone property is mitigated against rock fall risk to an acceptable life risk level, how will the banks treat the value of the property? If the Crown decides that the mitigants enable the property s zoning to be changed from red to green, we will value the property the same way as we would a property anywhere elsewhere in the country, for example, the same as a house on a hill in Auckland. Please contact our Earthquake Support Specialist Tim Challies The offer documents indicate mitigation is unlikely to result in removing the Port Hills Red Zone hazard notification. Therefore, would rely on the services of an appropriately qualified valuer to advise the value of the property, factoring in the evidence of mitigation. Financial cover Would all banks look at individual properties that fall below the life risk according to individual analysis? If the Crown decides that a property is within the green zone, we would treat it in exactly the same way as we would a property anywhere elsewhere in the country. The bank does not assess individual analysis of red zone-related risk. Please contact our Earthquake Support Specialist Tim Challies would look at individual professional analysis.

2 Will the banks provide new mortgage cover for red zone notified hazard land? If the Crown decides that a property is within the green zone, we would treat it in exactly the same way as we would a property anywhere elsewhere in the country. The bank does not assess individual analysis of red zone-related risk. Please contact our Earthquake Support Specialist Tim Challies considers all mortgage lending on a case-by-case basis. If the mortgage was used as bridging finance pending acceptance and completion of the Crown s Port Hills Red Zone offer then we would consider new borrowing in this case. Other factors may consider include the availability of insurance, a registered valuation and an engineer s report. Will the banks provide current mortgage cover for red zone notified hazard land? By mortgage cover we presume we are referring to the fact a bank holds a mortgage security over the property at present. If we have the mortgage over the security now, then we would continue with the mortgage. Yes, given the mortgage is already secured against the property, we would continue to support customers who are in this position. Please contact our does not anticipate removing current mortgages in place in the Port Hills Red Zone. Will banks recall mortgage on red zone properties if the owner stays? No - as long as the current mortgagee continues to make payments in line with the agreed loan contract. No, not due to it being Red Zoned, we continue to support customers in this position. Please contact our Earthquake Support Specialist Tim Challies It is unlikely that would recall a mortgage in place simply because of the Port Hills Red Zone, provided the borrowing continues to be repaid as contracted. Any additional or increased borrowing against that mortgage will be reviewed on a case-by-case basis.

3 If you have guaranteed insurance cover, will the banks lend against the property? We will consider each application on its merits. The insurance policy would need to have no exclusions, and the property would have to have an appropriate geo tech report and engineering report. Yes, although insurance is just one factor we consider, along with normal lending criteria. Please contact our Earthquake Support Specialist Tim Challies Yes, would be happy to consider using security in the Port Hills red zone property that is insurable. We may also require an engineer s report or registered valuation. Do banks have guidelines/policies on these issues already or are they relying on meetings such as this to provide then with material? We are currently reviewing our policy on the properties in the Port hills Red Zone. Please contact our Earthquake Support Specialist Tim Challies We ve done a lot of work to understand our changing environment and to support our customers through the rebuild. We seek information from many sources, including meetings such as these, and continue to review our guidelines and policies as well as continually up skilling our teams. Please contact our Yes has policies on these issues already. has been lending in New Zealand for 153 years. We have robust guidelines and policies that enable us to confidently lend in our challenging environment. The concerns raised at public meetings in Christchurch mirror those we discuss and resolve with our local customers every day. Are banks still providing reduced interest rate mortgages for properties affected by the red zone? We will work with customers to understand their needs and current situation and tailor a package accordingly. has developed a number of packages to respond to the differing groups of Canterbury Customers. A number of these packages have the ability to include interest rate discounts. Talk to us about your situation. Please contact our Earthquake Support Specialist Tim Challies Yes, is providing reduced interest rate mortgages for red-zoned properties. However, the Port Hills Red Zone hazard notification is different to the flat land. would be willing to assist Port Hills Red Zone property owners by waiving charges and reducing interest rates as appropriate.

4 How would a bank support a red zone owner who is going to cash settle, to progress and ensure they meet the rising building costs? We would assist them as much as possible, similar to the process we used for Flat land Red Zone customers in 2011 (bridging finance). Again each situation can be different and we will work with customers to understand their needs and tailor a package accordingly. Please contact our We would work with the customer to: Gain a fast pre-approval so they know what they can afford (preapproval is for 12 months) Have one of our construction specialists work with them and the building company they choose to lock in pricing of the build Structure the loan to suit their situation Provide the opportunity to fix portions of the loan during the build Please contact our Earthquake Support Specialist Tim Challies One of the best ways to support Port Hills Red Zone homeowners to progress and meet rising building costs is to enable them to move as quickly as possible. That is why would be happy to discuss your personal circumstances and look for ways to help you make an informed decision. How would banks support Port Hills red zone homeowners with mortgage options affected by rising interest rates, due to delays with Port Hills zoning review? As above. We would treat them on a case by case basis. We have a full range of fixed, floating and capped interest options, a number of customers have already taken advantage of these. For those who haven t, we will work through a solution to suit their situation. Please contact our There are several ways would assist Port Hills Red Zone homeowners including waiving fees, discounting interest rates, giving access to advice to make a fully informed decision, providing access to funds immediately the decision is made to accept the Crown offer and also providing increased borrowing if requested.

5 Will the bank support red zone Port Hills with bridging finance to help them move on before CERA settlement date? Yes, the same as we assisted customers in the Flat land Red Zone areas in Yes, we will look to provide further funding (subject to normal lending criteria) pending the payment from the crown. Please contact our Yes will. If a red zone Port Hills homeowner has commenced a build with a future end date can you lock in a mortgage rate during the process? This is treated as a construction loan and the loan is at the variable rate until it is fully drawn down. It can then be locked in at that point. We can fix in portions of the loan during the build. Talk to us about your situation. Please contact our Earthquake Support Specialist Tim Challies Yes. There are ways to lock in a mortgage rate with. While there are conditions, we can provide this facility for an extended time. All lending is subject to s normal lending criteria and terms and conditions and fees.