If you’ve been scrolling through kitchen designs or dreaming of updating your bathroom to something a little more modern, you aren’t alone.
According to recent data, more Kiwis are choosing to renovate an existing home over selling and buying in the current market.
ANZ, as New Zealand's largest bank, has just launched a dedicated Reno Loan. It’s a low-interest top-up designed specifically to kickstart home improvements.
But is it the right move for you? Let’s break down the details.
So what's the deal?
The ANZ Reno Loan is a specialised home loan top-up with some very attractive numbers:
A fixed rate of 2.50% p.a. for 3 years
You can borrow anywhere from $3,000 up to $50,000.
After the 3-year fixed period ends, the loan will revert to a standard fixed or floating rate.
You can use this loan for anything that adds value to your home, including bathroom and kitchen renovations, roof upgrades or repairs, flooring, interior or exterior painting or outdoor living
Why does this matter?
If you compared this to a standard 3-year fixed rate today of roughly 5.19%, the savings start to add up.
On a $50k loan, you’re looking at saving approximately $17 per week or $885 per year.
Over the full three years, that’s an extra $2,652 in your pocket which you could use however you like!
Is it right for me?
The biggest factors in eligibility is your equity and income position.
To qualify for this specific rate, you generally need to have at least 20% equity in your home (or 30% for investment properties).
Pro Tip: This 20% calculation includes the new $50,000 top-up. If you’re sitting right on the edge of that 20% mark, we should chat first to see how the numbers stacks up for your specific property value.
The second factor is your income and existing commitments, and this varies for everyone so book a call with your adviser to have a chat about how this looks for you.
How do I apply?
Even though it’s a "special" rate, the process follows a normal home loan application.
If you’re already with ANZ: It’s treated as a "full application" top-up.
If you’re looking to switch banks: You can take this loan as part of an overall refinance application. This allows you to bring your entire mortgage over to ANZ and take advantage of their other products (and potentially a cashback offer) at the same time.
In both cases you can expect to provide all the normal information for a top up, like payslips, bank statements, etc
Things to watch out for...
Before you sign on the dotted line, there are a few common things to check, which we can help you work through;
Cashback - If you switched banks recently (usually within the last 3 or 4 years), you likely received a cash contribution. If you leave your current bank before that term is up, you might have to pay some of that money back. We can help you calculate if the 2.50% interest savings outweigh that cost.
Break Fees If you’ve already locked in a new rate for a term expiring in April or May, or if you're in the middle of a fixed term, there may be a break fee to change your arrangements now. We can check with your bank to see exactly what that fee would be so your clear on any costs.
Product changes - if your current bank has a product that suits your situation, we can help review and make sure you're still going to be set up for success.
Keen to get started?
A $50,000 boost at a 2.50% rate can go a long way - whether it's a full kitchen refresh, a new roof or finally getting that landscaping done!
If you want to see how the numbers look for your specific scenario or if you're worried about equity and break fees, get in touch today.
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