Enjoy a place of your own with your Westpac Home Loan

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1 Enjoy a place of your own with your Westpac Home Loan

2 We know you d rather talk about your new home than your home loan. After all, buying a home is an exciting journey. But we d like to show you how choosing the right home loan can be just as satisfying. Contents You re in control of your home loan 3 Choosing the loan option that suits you 4 About split home loans 6 How do I make repayments? 8 Top tips for paying off your home loan faster 10 Ready to get started? 12 You re in control of your home loan. At Westpac you can create the home loan that suits the way you live. You can choose between different repayment types, different interest rates and different payment terms. Set your home loan up the way you want it now, and then change it when your life changes. We re here to help you get the most out of your loan today, tomorrow and in the future. Why choose Westpac? It s not easy to find a home that fits all the things you re looking for. With Westpac, if you re conditionally approved you ll be able to start looking around, knowing how much you can afford to spend. To help you find your new home and hunt with confidence we can give you a free E-Valuer property report from QV.co.nz.* We understand that life can be busy, so we have experienced Mobile Mortgage Managers who can meet you wherever you like, at the time that works best for you, seven days a week. We have loads of home loan options to suit your lifestyle and needs, like Choices Offset which could help you save thousands and cut years off your home loan. Turn the page to learn more about our home loan options and how you can mix and match to find the loan style that suits you best. Handy Tip Pay lump sums off your floating rate home loan and reduce the time it takes to repay it. *The free QV.co.nz E-Valuer property report is available with all home loan pre-approvals. The QV report provided is not a registered valuation but rather an estimate of the current market value of a property based on local, recent comparable sales. See QV.co.nz for more details. Westpac doesn t accept liability for loss arising out of use of a QV report. 3

3 Choosing the loan option that suits At Westpac we have a range of flexible loan options. Choose to put it all on just one type, or mix and match to enjoy the benefits of both fixed and floating, or capped rates. A good way to start is with the table below, to give you an overview of all your options. Did You Know? Our home loans have a maximum term of 30 years. But we know a lot can happen in 30 years, and that s why you may be able to take your home loan with you if you move house. Name of Westpac Home Loan What it is: It might be for you if: Choices Everyday Your home loan and daily transactions are combined in one account. When your income is paid in, it immediately reduces your home loan balance so you could pay less interest. you re happy to have your home loan and transactions in one account. you want the flexibility to pay lump sums off your home loan without additional costs. you re comfortable with a floating rate knowing that interest rates could change. you want to reduce the amount of interest you pay. Floating Rate Choices Floating A simple home loan with an interest rate that increases and decreases in line with the market. You can choose to change all or some of your floating rate loan to a fixed or capped rate at any time. you want the flexibility to pay lump sums off your home loan. you re comfortable with a floating rate knowing that interest rates could change. you want to increase your regular repayments at any time without penalty. Choices Offset Your eligible Westpac transaction and savings account balances offset your home loan so you only pay interest on the difference. In some circumstances, you can also offset accounts held by your immediate family, maximising your offset benefits. you want to focus on saving as well as paying off your home loan and keep your savings separate. you want to reduce the amount of interest you pay. you want to reduce the length of your loan. you re comfortable with a floating rate knowing that interest rates could change. Fixed Rate Choices Fixed You fix your interest rate at a certain amount and it will stay the same for the fixed rate term, even if interest rates in the market change. When the fixed rate expires, you can choose another fixed rate term and amount or go on a floating or capped rate. - you want the certainty that your repayments aren't going to change during the fixed rate term. - you don't think you'll want to make lump sum payments off your loan during the fixed rate term. - you want to increase regular repayments up to 20% of initial repayment at any time during the fixed term without penalty. Capped Rate Choices Capped Your interest rate is capped for a set term, so if rates go up, your interest rate won t go higher than the capped rate during the capped rate term. - you want some control over the rate you are paying but also want to be able to benefit if interest rates fall. - you want the flexibility to pay lump sums off your home loan without additional costs. - you want to increase your regular repayments at any time without penalty. 4 5

4 About split home loans You have the choice to split your Westpac home loan and combine different interest rate types. You could have two different fixed rate terms, or a mix of floating, fixed and capped rates. Splitting lets you choose the benefits you want from your home loan, such as the certainty of a fixed rate term, as well as the flexibility of a floating rate loan. Read on for more benefits. Some of the benefits of splitting your home loan It s smart, because: having a portion on a floating or short-term fixed rate lets you take advantage of low interest rates right now it s flexible you can pay the floating portion off as fast as you like without additional cost it could save you even more on interest (with our Choices Everyday Loan ask us how) It could also bring you peace of mind, because: the greater the fixed rate portion is, the more certainty you will have knowing what your monthly repayments will be you can choose a fixed rate term that s right for you, or even select a combination of fixed rate terms on the one loan the floating portion provides you the flexibility to redraw on your loan, whenever you need to the floating portion can be changed into a fixed rate term at any stage How can you split your loan? Try it yourself. If you d like to get more hands-on, go to westpac.co.nz to work out your own home loan scenario online with our handy split home loan calculator. Handy Tip Flick back over to the Home Loan Options page for a table comparing loans styles including fixed, floating, capped and split loans. 6

5 How do I make repayments? Westpac home loans are designed to be flexible, even down to the way you repay your loan. Generally our home loans are designed so that you pay off some of the loan and interest with each repayment. That way your loan is paid off within the agreed term. Depending on your loan type, you can increase or reduce your home loan payments depending on what s happening in your life, changing your repayment style to suit you. Repayment options Different loan types offer different benefits and repayment options. Let s take a look. Table loan Interest Only loan Regular payment amount Interest An Interest Only loan is where you pay only the interest owing each fortnight or month, but nothing off the principal. These are usually short-term loans (up to 5 years) to help keep payments low while you re building or renovating, or if you need bridging finance while you try to sell another home. You ll need to repay the outstanding loan at the end of this period or get another loan. Reducing (Flat) loan Regular payment amount Interest Regular payment amount Interest Principal Principal With a Table loan your regular payments are the same each time (unless interest rates change). At first most of the money goes towards the interest you owe, but as your loan starts to go down more of each payment goes towards the principal. This is the most popular type of home loan because it gives more consistency to your repayments. With a Reducing Flat loan you pay a set amount off the loan regularly plus the interest you owe. So your repayments are a lot higher at the start than later on but this can save you interest because you pay more off the principal earlier on. Revolving Credit loan Loan limit Loan balance Did You Know Our Revolving Credit loan is called Choices Everyday. It gives you the most flexibility in your repayments. With a Revolving Credit loan your loan and everyday banking are combined in one account. There are no set repayments but you ll need to make sure your balance stays below the limit at all times. 8 9

6 Top Tips for paying off your home loan faster Increase the amount you repay: it sounds obvious, but the more you repay, the less interest you ll pay on your home loan in the long run Pay half your monthly loan repayment each fortnight: this works out that you make two extra payments per year (compared to when you pay monthly), reducing the overall interest costs you ll pay over the repayment period of your loan Shorten the term of your loan: this means your repayments will increase and you ll pay off your loan faster, with less overall interest payments Pay lump sums off your loan*: if you ve saved up or received a lump sum, using this to reduce the outstanding balance on your home loan could reduce the time it takes to pay off the loan *Remember - break costs may apply if you have a fixed rate loan and you pay back part or all of it during the fixed rate term. If you are on a fixed term, you can increase your repayments by up to 20% of the initial repayment amount without penalty. Keep your monthly payments the same when the interest rate drops: this means more of each payment will go towards repaying principal (as opposed to interest) Think about a revolving credit account: with a revolving credit facility, when you pay your salary into your home loan account your loan balance goes down meaning you pay less interest With Choices Offset, you could save thousands on your interest repayments and cut years off your home loan: it gives you the ability to use the balance of your eligible Westpac transaction and savings accounts, as well as those of your immediate family to offset against your floating home loan and only pay interest on the difference. Linked accounts will not earn interest. A note about early repayment penalties Paying off your fixed rate home loan early, or breaking the fixed term of your fixed rate home loan in order to get a lower rate can mean that a break cost will be charged. How come? Because in doing so you break the contract you entered into with us when you signed up for your fixed term, and as a result we may have to rearrange funding positions that we have in place in the wholesale interest rate market. Any cost that arises because of this is passed on to you. Sometimes this break cost is also called the prepayment cost. If you want to know the exact costs associated with breaking your fixed rate home loan we can provide you with a quote. Go to westpac.co.nz to learn more. Need more info? There s plenty more to learn about Westpac home loans at westpac.co.nz. Or if you d like to set up a time to meet with one of our home loan specialists in-branch, call Westpac on

7 Ready to get started? Whether you re buying your dream home, switching to us or topping up an existing home loan, we re here to help. There are a few ways you can apply for your home loan: Online: If you are already a Westpac customer you can apply online using Westpac One. If you re thinking of joining go to westpac.co.nz to apply for an online conditional approval. Your home loan application could be conditionally approved in just 60 seconds of submission Call us: Talk to one of our home loan specialists by calling , and arrange a time for a mobile mortgage manager to come to you In-branch: Pop into your nearest Westpac branch to set up a meeting Need more info? Take a look online at westpac.co.nz or ask in-branch to make an appointment with a home loan specialist. This information is current at 1 April 2016 and may vary from time to time. The information in this brochure is intended as a guide only and doesn t take into account your personal financial situation or goals. Westpac s current home loan lending criteria and terms and conditions apply. An establishment charge and/or a Low Equity Margin may apply. An additional fee or higher interest rate may apply to loans if the application is accepted but doesn t meet the standard lending criteria. A Choices Offset Arrangement Set Up fee and Choices Offset Monthly fee applies. You can get a copy of the current disclosure statement for Westpac New Zealand Limited from any Westpac branch in New Zealand free of charge. Westpac New Zealand Limited WT