Simplicity Kiwisaver enters the mortgage market

First Home buyers can withdraw some of their Kiwisaver savings to go towards their deposit on their first home as long as they have been a Kiwisaver member for at least 3 years

Simplicity Kiwisaver fund is looking to help first home buyers more by offering to write mortgages at 2.95%.

Most banks at the time of writing are offering mortgages around 3.5%, so a loan from Simplicity will save you 0.5% per annum. So for a $500,000 mortgage, you are looking to save $2500 each year.

What are the terms and conditions?

Well first you have to be a first home buyer so that eliminates all those borrowers who already have a property.

Secondly, you have to be a member of the Simplicity Kiwisaver fund to be eligible.

Thirdly, if demand is too high, a ballot will be drawn to decide who gets the mortgage.

The good news is it creates competition for the banks and also the mortgage will be a floating rate mortgage meaning if you get a pay rise or a bonus you can pay off some of your principal without getting penalised.

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