The banking industry today launched an online calculator that allows consumers to compare up to three home loan offers. This initiative responds to a recommendation in the Commerce Commission’s market study into personal banking services.
The home loan calculator is hosted by Interest.co.nz and is available here: https://www.interest.co.nz/calculators/home-loan-comparison-calculator
The calculator will allow prospective borrowers to compare costs and incentives included in each offer to provide an estimated effective interest rate per annum. The effective interest rate is what the borrower pays after taking into account any cashback and other benefits offered by the lender, along with loan fees and any other costs.
New Zealand Banking Association chief executive Roger Beaumont says: “We are delighted to launch the calculator in association with Interest. Our banks compete strongly in the home loan market, and we support providing borrowers with clear information to help make one of the most important financial decisions of their lives.
“We’ve tried to keep the calculator as user-friendly as possible. We hope uptake is strong and that users find it helpful.”
The calculator’s development and ongoing maintenance is funded by members of the New Zealand Banking Association.
ENDS
Note
The home loan calculator responds to recommendation 10 of the Commerce Commission’s market study into personal banking services:
10. Home loan providers should present offers in a readily comparable manner, accounting specifically for the effective value of cash contributions. Industry should create a standard means of comparing home loan offers across all providers such as through a single effective interest rate that incorporates the effect of cash contributions over the clawback period to help consumers compare the cost of different loan offers.