Property

Bank discounts not a right: Ombudsman

Homeowners are being reminded banks are not required to cut them a deal.

Wednesday, June 20th 2012

Over recent weeks there have been numerous media reports of banks trying to win business from each other with better interest rates and deal-sweeteners such as contributions towards legal fees and break fees.

Borrowers have reported receiving up to $5000 from banks to encourage them to move their lending.

But Banking Ombudsman Deborah Battell said her office had started to receive complaints from bank customers who had not been offered break fee discounts.

“Customers have heard that banks have been reducing or waiving break fees and they are complaining that their bank won’t do this for them.

“I am not aware of how widespread the discounting is, nor do I have direct evidence that it is happening,” Ms Battell said. “But I can say that banks are legally able to charge break fees and they are not obliged to offer discounts.

“Break fees are specifically allowed for in credit contracts legislation and are designed to compensate banks for the costs they incur when customers break their fixed term contracts.

“Banks can also decide whether they want to discount or waive fees and may choose to do so in individual cases. If this is happening, it is likely to be a response to the current highly competitive environment for lending. It does not mean that banks will do this for everyone.”

Comments

No comments yet

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.