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Mortgage Rates Commentary

NZF changes its high LVR loans

Monday 29th of March 2010

NZF has added further mortgage insurance options to its loan products and has re-adjusted the way it structures high LVR loans (80 – 95%).

Instead of the previous Low Equity Margins, which were added to base interest rates, NZF now offers a more competitive interest rate (with only a 0.25% rate margin), and will capitalise the LMI premium – into an Accelerator Account.

High LVR loans will be ‘split’ into two parts – with the LMI portion in a separate floating facility to be repaid over a short term (between 2 and 4 years depending on the LVR). This LMI Accelerator Account will give the borrowers the opportunity to repay this portion of their loan faster, with no penalties.

"LMI is a necessary and inevitable cost on high LVR loans – and we feel offering clients the opportunity to pay this down as fast as possible is the right thing to do," NZF says.

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1 day ago Jon-Paul Hale
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Sticking an oar in, while we have “service” requirements the expectation that an adviser is responsible for discussing said change is relying heavily on assumption. 1. That the client hasn't moved and contact details haven't been updated. It happens more often than many think. 2. It assumes there is a servicing agreement in place to provide service. Remember the requirement is to scope service not provide it. A client deciding to have ad-hoc service on their request is a legally valid position to have. 3. If there is a service agreement that's realistic to what is expected, how long does the adviser push the issue to have the discussion before moving on with everything else they have to do? Again, a point that is not clear in the guidance to date. The challenge of the present rules is the adviser is responsible for ensuring the client understands the advice provided. How do you ensure you're covering this if a client doesn't engage despite genuine attempts to manage it? There's still a lot of “what if’s” in this whole are we’re only going to have clarity on once someone is taken to task about it. But first we need to have clarity on what ongoing service actually is, because right now demonstrated by the direct providers a letter once per year with a please call if you want to discuss is the current minimum…
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To correct errors in my previous post: "policies, templates, and controls" should read "policies, processes, systems and controls", and "is more conductive" should read "is more conducive".
2 days ago Paul Flood
FMA outlines its latest expectations for advisers
The goalposts haven't shifted, and no-one is moving the hole to the side of the green just to mess with the twilight burglars. The phrasing of the opening sentence ("having policies, templates, and controls in place is no longer enough") might suggest otherwise, but the wording is unfortunate. Having policies, templates, and controls in place was NEVER enough - it is a necessary, but not sufficient, condition of "playing by the rules" since 15th March 2021. A new player to golf might completely miss the ball on their tee shot - a swing and a miss. The wise coach/mentor/official knows that adding a stroke to the scorecard at this early stage of the player's development could have a deleterious effect. A reminder of the rule and the sanction - not applied at this early stage of development - is more conductive to continued participation. Focus on learning to hit the ball in the first instance, and move on to applying the penalty once the basics are firmly bedded in. No rule change, just a firmer application of the existing rules as the golfer matures.
2 days ago Paul Flood
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2 days ago agressively passive