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Advisers deal with client turmoil

Advisers say clients are asking for debt consolidation, moves to interest-only lending, and mortgage holidays, as the Covid-19 financial crisis takes hold. 

Thursday, March 26th 2020, 8:17AM

Mike Wong

The coronavirus has now put New Zealand into a level 4 alert shutting non-essential businesses across the country. The fallout has led to huge redundancies, with economists predicting another global financial crisis.

In the wake of the turmoil, advisers say clients are asking for moves to conserve capital and cut expenditure. 

Mike Wong, an adviser at Mike Wong Financial Services, says customers were focused on refinancing and debt consolidation to save cash.

"I'm concentrating on existing clients, who are looking to cut debt and clear credit card [balances], to save money for school fees. Most were paying up to 17% or 18% on things like car loans, and I have managed to reduce their rates and move their home loans to 3.05% for one year."

Wong says clients had also asked for mortgage holidays, but banks were taking between "7-10 days to see applications".

Wong believes advisers should focus on existing clients' needs during the crisis. "That is a service we can offer. The banks are still open, and we need to look after our clients."

Kris Pedersen, of Kris Pedersen Mortgages, said clients were keen to shift to interest-only to cut costs. 

"With most of our customers being investors we are mainly seeing interest-only requests, and now a move to the mortgage holiday scenario as tenants not being able to pay picks up. Cashflow is king right now and everyone is trying to preserve it."

Craig Pope, of Pope & Co Mortgages in Wellington, says most of his clients have weathered the storm so far, but fears the situation could deteriorate if tenants stop paying. 

I think most of our investors have a buffer. Though it may change if their tenants don’t pay rent!

Tags: coronavirus Covid-19 Kris Pedersen Lending mortgages

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 3.29 3.45 3.85
ANZ Special - 2.79 2.95 3.35
ASB Bank 4.45 3.35 3.19 3.85
ASB Bank Special - 2.85 2.69 3.35
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 2.79 ▼2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.39 ▼3.29 ▼3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 2.80 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.80 2.89 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 4.40 2.95 2.95 3.69
Kainga Ora 4.43 ▼3.29 ▼3.39 ▼3.85
Kiwibank 4.40 3.74 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 2.65 2.79 3.25
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 3.75 3.99 -
Pepper Essential 5.18 - 4.98 4.98
Resimac 3.49 3.45 3.39 3.69
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - 2.99 3.05 3.69
The Co-operative Bank - Owner Occ 4.40 ▼2.79 ▼2.95 ▼3.39
The Co-operative Bank - Standard 4.40 ▼3.29 ▼3.45 ▼3.89
TSB Bank 5.34 3.59 ▼3.59 4.19
TSB Special 4.54 2.79 ▼2.79 3.39
Lender Flt 1yr 2yr 3yr
Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.79 ▼2.69 ▼2.79
Median 4.55 3.32 3.39 3.69

Last updated: 28 May 2020 10:38am

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